Railways: Network Rail
	 — 
	Question

Earl Attlee: To ask Her Majesty's Government whether they have any plans to amend the corporate governance arrangements for Network Rail.

Lord Adonis: My Lords, Network Rail is a private sector company limited by guarantee. Changes to Network Rail's corporate governance are matters for its board and members and the independent Office of Rail Regulation, not for Ministers.

Earl Attlee: My Lords, I thank the Minister for that reply. Given the widespread concern regarding Network Rail's corporate governance and, most importantly, its operational effectiveness, why has his department not exercised its right as a special member to appoint a director to the Network Rail board?

Lord Adonis: My Lords, it is not corporate governance that is the point at issue, we believe, but how Network Rail's executives go about the business of improving the efficiency of its operations. The ORR's recent determination gives Network Rail very significant incentives to improve its efficiency by 21 per cent over the next five years. We believe that the managers of Network Rail need to concentrate relentlessly on improving efficiency, and it is a matter for Network Rail itself whether it believes that changes in corporate governance will help to that end.

Lord Faulkner of Worcester: My Lords, while accepting what my noble friend said in his first Answer—that the governance of Network Rail is not a matter for Her Majesty's Government—no doubt he will express some pleasure at the decision of its chief executive to forgo the bonus last year, which presumably was in response to some gentle pressure which he applied to himself. Is my noble friend aware that this is very welcome indeed?

Lord Adonis: My Lords, the decision was taken by the chief executive of Network Rail entirely on his own account. However, I have always subscribed to the wise words of Ralph Waldo Emerson that the reward for a job well done is to have done it.

Taxation: Interest Rates
	 — 
	Question

Lord Dubs: To ask Her Majesty's Government whether they will pay taxpayers the same rate of interest for repayment of overpaid tax as they charge them for late payment.

Lord Myners: My Lords, for most taxes interest on late payment is charged at a higher rate than the interest applied to repayments of overpaid tax. This is in line with the practice in most other tax authorities and, of course, in business. HMRC has been consulting on a new interest regime, and during consultation it was generally accepted that differential rates were appropriate. Following the consultation, the Government announced at the Budget that they would continue with the policy of using differential rates.

Lord Dubs: My Lords, I am grateful to my noble friend for that Answer, but I am not sure that I have quite understood it. Will my noble friend confirm that the position is that if any of us as taxpayers owes money, we are charged 2.5 per cent interest, but if the tax authorities owe us money, it is 0 per cent? Why?

Lord Myners: My Lords, I endeavour to answer that by reference to the principles on recompense that we apply, which are based on fairness and simplicity. I point out that it is generally the practice of banks to pay a slightly lower rate of interest to those who owe the bank money or replace deposits and to charge a slightly higher rate to those who have borrowed as a positive incentive. Having a single rate for interest charges would make it extremely difficult to choose a rate that did not have the perverse incentive effect of either encouraging people not to pay their tax or, alternatively, to use HMRC as if it were a deposit-taking bank.

Lord Newby: My Lords, does the Minister accept that for most people who are owed tax, the most important thing is how quickly they get their money back, not the rate of interest on it, particularly since interest rates are very low in any event? Can the Government give an assurance that just as they are making sure at this time that they pay their suppliers quickly, HMRC repays tax quickly as well?

Lord Myners: My Lords, I agree entirely with the noble Lord, Lord Newby. It is an issue of the availability of funds rather than the cost of funds which is often critical, particularly to smaller companies, and HMRC is committed to making prompt repayment of overpayment when it becomes aware of such a situation. It endeavours to do this within a 30-day period of becoming so aware. It generally achieves that target with a high degree of success, except at times of peak operating periods such as the end of the tax year.

Baroness Gardner of Parkes: My Lords—

Lord Thomas of Gresford: My Lords—

Baroness Gardner of Parkes: My Lords, is the Minister aware that this can be very annoying for the taxpayer? I found myself in receipt of a £13,000 payment from the Inland Revenue when I knew that I owed it money; it did not owe me money. Having notified it of this, it said that I would have to pay interest on the money. It took six letters or more, each time referred to a higher level, to have the matter reviewed. In the end, it said that it would not charge me any interest on the money. There was every reason to have just stuck to the £13,000; it was so difficult to give it back. What must that have cost the public in administration? What does the Minister think? Could money not be saved there?

Lord Myners: My Lords, I am sure the noble Baroness was extremely clear and forthright in her representations to HMRC. I imagine that mistakes occur. Taxes are extremely complicated, particularly where people have multiple sources of income, and therefore at times overpayments or overcredits will take place. HMRC is committed to rectifying such mistakes as swiftly as possible, but I am sure there are particularly complex cases where it will take a little longer. I am delighted to hear that the noble Baroness in the end achieved the outcome that she believed was right. I hope that we made good use of the funds while we held them.

Baroness Howarth of Breckland: My Lords—

Lord Thomas of Gresford: My Lords, I apologise to the noble Baroness for rising to ask a question before her, but the 30 days repayment has really struck home. I was informed at the beginning of March that I would receive a repayment of tax. Two months went by, and I asked why I had not received it; HMRC said it was not sure about my address. For 39 years I have lived at and paid tax from that address. When I asked for the cheque, HMRC said, "Well, it will take 10 days for you to get your cheque". Is there a strategy to delay repayment of tax?

Lord Myners: My Lords, I feel I am going to be drifting into answering individual tax queries on behalf of noble Lords. Rest assured, there is no strategy other than to ensure that people pay the right amount of tax at the right time; if they overpay, that they receive that overpayment as promptly as possible; and, in a more normal interest rate environment—that is, not one characterised by 0.5 per cent base rates—there would be some compensation. In the event that the individual does not pay a sufficient amount, they will be pursued to do so and will be charged for late payment. That seems to me to be an equitable and fair approach. How the Inland Revenue was able to contact the noble Lord to tell him that he was owed money but not able to contact him to get the money to him baffles me at the moment. I am sure the noble Lord will tell me outside the Chamber if he feels that I should have more information.

Baroness Howarth of Breckland: My Lords, I will ask the Minister a general question. In most of the authorities and government departments in which I have worked, statistics have been kept of the number of complaints and the number of outstanding amounts that needed to be repaid and the amount of interest, at whatever rate it was. Does the tax office have these kinds of statistics and, if so, can they be published?

Lord Myners: My Lords, HMRC sets performance objectives in these areas and monitors progress against those objectives. That has quite an important influence on the allocation of resource if it is falling short of its targets.

Lord Howard of Rising: My Lords, the Minister referred to tax being very complicated. Who was responsible for the tax advice manuals going from one volume to almost an entire library in the past 10 years?

Lord Myners: My Lords, the complexity of tax reflects the increased complexity of life in the economy.

Lord Kilclooney: My Lords, since the underpayment of tax, particularly capital gains tax, is more topical these days than the overpayment of tax, what interest will people who have underpaid their capital gains tax be required to pay?

Lord Myners: My Lords, I believe that the rate of interest chargeable is 2.5 per cent per annum.

Lord Geddes: My Lords, given the Minister's remarks about tax being somewhat complicated, is he therefore denying the HMRC advertisement that says that,
	"Tax doesn't have to be taxing"?

Lord Myners: My Lords, that is just an interesting play on words that no doubt came from an inspired copywriter and was designed to encourage people that, as far as basic tax for the ordinary working person is concerned, it is a fairly simple exercise that should not be intimidating or daunting. The literature and websites that are available are designed to facilitate understanding in order that people can make their full and proper contribution, as I am sure they would wish to do.

Lord Dubs: My Lords, does my noble friend have among his papers information about the sum of money that is charged to taxpayers on the 2.5 per cent basis and how much is owed the other way?

Lord Myners: My Lords, that is an interesting question. I thought I had those data, but apparently I do not. From recollection—I have found it. Interest charged on direct taxes in the year to October 2007 was £957.8 million, a not insignificant amount. Interest charged on late payment of VAT in respect of 2007-08 was just under £100 million.

Turkey
	 — 
	Question

Lord Hylton: To ask Her Majesty's Government what steps they and their European Union and NATO allies are taking to encourage political dialogue within Turkey on decentralisation, protection and self-determination for minorities, and reforms in the criminal justice and penal systems.

Lord Malloch-Brown: My Lords, the UK sees Turkey's European Union accession process as the most effective catalyst for change. Through this process, working closely with our EU partners, we encourage the expansion of cultural and minority rights and reform in the criminal justice system. We encourage NATO partners who are not in the EU to support reform. The FCO also provides support for criminal justice reform including training, and funds projects that support anti-discrimination and minority rights.

Lord Hylton: My Lords, I thank the Minister for his reply. Does he agree that internal dialogue in Turkey between its several different traditions is necessary if the Kurdish, Armenia and Cyprus questions are ever to be resolved? Are these not the keys to Turkey's EU application?

Lord Malloch-Brown: My Lords, I confirm that resolving relations with Cyprus and Armenia is an important obligation on EU candidates, in this case Turkey, because it is a requirement of good neighbourly relations. We have encouraged Turkey to resolve these issues through both internal and external dialogue.

Lord Anderson of Swansea: My Lords, the Turkish Government are the first to acknowledge that there are deficiencies, but does the Minister agree that the direction of travel is right and that in many ways Turkey is a model for other Islamic states? How does he assess the recent joint declaration made by Chancellor Merkel and President Sarkozy that Turkey can only hope to enjoy a privileged position within the EU and will be barred from membership? Is that likely to affect the current negotiations that have been promised to Turkey since the 1960s? What is the UK Government's position in respect of the declaration and its implications?

Lord Malloch-Brown: My Lords, as far as the UK Government are concerned, EU policy remains unchanged: there is an accession process for Turkey under way. The UK strongly supports it, and strongly supports Turkey's eventual membership of the EU.

Lord Wallace of Saltaire: My Lords, President Gul's positive recent statement about greater integration of Kurds as a minority into Turkish political life has been roundly attacked by both the main opposition parties and appears not to be supported by substantial elements within the armed services. In those circumstances, I hope Her Majesty's Government are giving every support they can to the constitutional authorities in Turkey to continue the dialogue. I also hope that British political parties which may have closer links to the opposition parties than to the AKP are trying to get across the same message.

Lord Malloch-Brown: My Lords, we have noticed some loss of momentum in reform in Turkey both on other accession issues such as economic reform and on issues relating to the Kurdish areas. The recent decline in the ruling party's vote in the local elections in that area of the country may have served as something of a disappointment to it. However, I completely agree with the noble Lord's point. We must give them every encouragement to stick to the difficult road they are going down and to continue to try to bring this group fully into the political mainstream through the reforms that they have under way.

Lord Maginnis of Drumglass: My Lords, although I understand the answer that the Minister has given, may I suggest that it is our duty to remember that Turkey has been our ally for 90 years, including during the Cold War period? It is a massive country with massive problems but everybody, including this Government, seems willing to put its interests on the back burner. Is it not time that we moved its interests forward in terms of membership of the European Union?

Lord Malloch-Brown: My Lords, I completely agree with the noble Lord's fundamental analysis. Turkey is an extraordinary country with an extraordinary history, and, in our view, it has an extraordinary future within Europe. It is enormously important that we continue pressing for that. However, as an earlier question suggested, unfortunately, our enthusiasm for Turkey's membership of the European Union is not universally shared by all other member states. We need to fight back against that.

Lord Howell of Guildford: My Lords, while we welcome social advance in Turkey and its eventual membership of the European Union—where it will become by far the biggest member when it finally arrives—Turkey is today at the epicentre of world events and Middle East events and, indeed, of all links between Islam and the western world. Will the Minister ensure that in supporting Turkey's efforts in every way, we are less inclined to lecture and more inclined to encourage and support? Sometimes the lectures sound a little high-handed, particularly when we have enough troubles of our own here at home.

Lord Malloch-Brown: My Lords, I certainly endorse the noble Lord's view that lecturing is not the most appropriate form of foreign policy. The rebuke, if it is that, is well taken, because we need in general to be careful about asserting these points in a lecturing way. However, I hope that the relationship with Turkey is well situated within a European Commission review process across the so-called 35 chapters and the Copenhagen principles and so on, where there is continual review of progress and yearly reporting on it, and that this technical discussion avoids anyone getting up into the pulpit and offering the kind of lecturing that the noble Lord rightly wants to avoid.

Lord Corbett of Castle Vale: My Lords, will the Minister confirm that since the election of Mr Christofias as the President of the Republic of Cyprus and Mr Mehmet Talat as the leader of the Turkish Cypriot community, Turkey is playing a much more positive role in trying to assist that settlement process, not only because of the pressures around the application to join the European Union but because it is now recognised on both sides of this long-standing dispute that the time has come to settle it, and there are two leaders in place in both communities who are determined to do their best to achieve that very end?

Lord Malloch-Brown: My Lords, we are very pleased about the fact that there are now two leaders who very much want to arrive at a negotiated settlement to this dispute. We believe that the Government of Turkey have played a constructive role in this. There is still further to go in the negotiations than we would have wished, and the early honeymoon has turned into a long, hard slog in trying to make progress on the negotiations.

Lord Kilclooney: My Lords, on the issue of Cyprus, Turkey and Greece, can the Minister confirm that the Presidents of Greek Cyprus and Greece are totally opposed to a policy of enosis?

Lord Malloch-Brown: My Lords, the British Government's view on that is well known. We feel very strongly that the two communities have to find a way in which to live together in full respect for each other and for each other's rights.

The Lord Bishop of Chester: My Lords, would the Minister agree that absolute religious freedom, including the freedom to convert from one religion to another, is a core human right and must be fully accepted by any member country of the European Union?

Lord Malloch-Brown: My Lords, I certainly would. There are issues on which Turkey still needs to make progress, including issues about the Turkish penal code. For example, there has been a dispute recently about movements to Islamise the state, which have been resisted, with regard to headdresses and such like. Those issues are highly sensitive in Turkey, but we believe that the Government understand the nature of pluralistic religious freedoms and are trying to find a way through that cultural thicket.

Lord Dykes: My Lords, would the Minister not further agree that Turkey needs also to reassure western Europe and the United Kingdom that it will proceed much more rapidly with the economic modernisation necessary east of Ankara, where, apart from tourism, there is a very low rate of income, GNP and output? That needs to be put right to reassure the other EU member states that have serious hesitations about its membership.

Lord Malloch-Brown: My Lords, as I said in answer to an earlier question, I think that the noble Lord is quite right. We are disappointed about how the momentum of economic reform has slowed down. We are using every means that we can to encourage the Government of Turkey once more to put their foot on the pedal and accelerate those reforms, despite the fact that it is now a difficult economic time to be doing that in any country.

The Earl of Listowel: My Lords, can the Minister say what progress is being made in improving the treatment and experience of children and young people in the criminal justice and penal system in Turkey—or will he write to me?

Lord Malloch-Brown: My Lords, I shall certainly need to write to the noble Earl. There are improvements in the penal code system in general, but there are difficulties with regard to children, some of which have been the subject of television programmes in this country. I shall be happy to give the noble Earl an update on those issues.

Sri Lanka
	 — 
	Question

Baroness Northover: To ask Her Majesty's Government what action they will take with the international community in relation to Sri Lanka.

Lord Malloch-Brown: My Lords, we continue to work with the UN, EU, the Sri Lankan Government and key international partners to alleviate the humanitarian situation facing the estimated 250,000 civilians displaced by the fighting and to press for progress on a political solution that is based on equality, consent and the rule of law. On 17 May, the Prime Minister announced an additional £5 million in humanitarian aid for Sri Lanka, taking the total to £12.5 million since September 2008.

Baroness Northover: My Lords, I thank the Minister for that reply. Does he agree with Professor Michael Clarke, writing in yesterday's Times that,
	"no insurgency is ever beaten by force alone".?
	The President of Sri Lanka the other day reached out to the Tamil community. Does the Minister agree that it would sent a very positive sign to that community if the Government of Sri Lanka now allowed international access to the conflict zone and the main IDP camps?

Lord Malloch-Brown: My Lords, I agree with both of the noble Baroness's points. Now that the battle has been won in terms of securing their territory, it is absolutely incumbent on the Government of Sri Lanka to show statesmanship, reach out and try to find a political solution that allows the Tamil people a sufficient degree of control over their affairs so that they become contented citizens of a united Sri Lanka.
	The second issue is humanitarian access. We have been repeatedly promised, both as the UK and through the international community—the United Nations and the International Committee of the Red Cross—that the staff of international humanitarian organisations would be given access to the area in the north where the fighting has been taking place. That is still frustrated. Every day that goes by we worry about the costs, in terms of lives lost and disease and hunger not dealt with.

Baroness Knight of Collingtree: My Lords, does the Minister have any news about when the battle of Parliament Square will be over, and when Members of this House will be able to attend their business without let or hindrance?

Lord Malloch-Brown: My Lords, like every Member of this House, I hope that it will be over soon. The young men and women—well, people now of all ages—who are out there would be doing their cause as well as all of us a favour if they moved their activities to a different area. There are plenty of ways in which they can exert pressure for a political solution, and plenty of opportunities for them to raise humanitarian assistance. However, they are in danger of losing public support by remaining there indefinitely.

Lord Lea of Crondall: My Lords, one interest that this Parliament has in the question of Sri Lanka is access through Parliament Square. However, there is equal interest—let us put it that way—in the welfare of the people of Sri Lanka. Although it is not for Her Majesty's Government to determine parliamentary relations, is this not a good time to suggest a parliamentary visit, specifically incorporating all of the points and conditions stated by the noble Baroness, Lady Northover? Perhaps my noble friend could have a word with the high commissioner.

Lord Malloch-Brown: My Lords, as the noble Lord knows, a group of MPs representing an inter-parliamentary group from the House of Commons went to Sri Lanka recently, as did the Foreign Secretary. There have been a number of visitors from Sri Lanka here; this morning I received the leader of the Sri Lankan opposition at the Foreign Office. There is continued dialogue. I am extremely anxious that we should go on making the point to the Sri Lankans that there is a long, historic friendship between our two countries and that we want them to do right by this community and to find a political and democratic solution to this long-running conflict.

Lord Avebury: My Lords, on humanitarian access, is the Minister aware that it is not only the zone formerly occupied by the LTTE, but also Menik Farm—the largest displacement camp, which contains 100,000 displaced persons—to which access is severely restricted? When the UN Secretary-General visits Sri Lanka, as I understand that he will in the next couple of days, will the Government ask him to raise the question of total freedom of access, not only for the ICRC but for agencies such as the WFP and UNICEF?
	On the political front, what consultations are being conducted by President Rajapaksa with the Tamil community to see how the necessary constitutional changes can be taken forward immediately, instead of waiting a long time while people become more discontented?

Lord Malloch-Brown: My Lords, my right honourable friends the Foreign Secretary and the Prime Minister have both spoken to the UN Secretary-General in recent days, and the Prime Minister has also spoken to President Rajapaksa. Access to the IDP holding camps as well as to the areas of displacement in the conflict area itself has been repeatedly raised, and we will continue to raise it. That covers organisations such as WFP and others.
	On the noble Lord's second point, there is a long-standing political discussion under way, which includes Tamils in a subordinate way, around the so-called Article 13 amendment. We are pressing for something more ambitious than that and a broader dialogue with a more representative group of Tamils.

Lord Naseby: My Lords, have Her Majesty's Government congratulated the Sri Lankan Government on defeating the Tamil Tigers and bringing peace to the country? On the international front, is it Her Majesty's Government's policy primarily to tackle the resettlement of the 250,000 Tamils and the 100,000 Muslims who were ethnically cleansed from Jaffna, or is it to continue to lecture that there should be a constitutional settlement, which really rests with the Parliament of Sri Lanka?

Lord Malloch-Brown: My Lords, we certainly respect the noble Lord's final point—that the political solution to this must come from inside Sri Lanka from a process set up and led by President Rajapaksa. Indeed, in our initial contacts with the president, we congratulated him on the finishing of a brutal 26-year civil war, which was instigated by the Tamil Tigers—a terrorist group. But we also made it extremely clear to him that, whether or not that victory would be seen as the opening of a new and happier chapter in Sri Lanka depended on whether he could now go that next step and show the statesmanship to find a political as well as humanitarian solution to this community's issues.

Parliamentary Standards Authority
	 — 
	Statement

Baroness Royall of Blaisdon: My Lords, with the leave of the House, I will repeat a Statement made in another place by my right honourable friend the Leader of the House of Commons. The Statement is as follows:
	"With permission, Mr Speaker, and following on from your Statement to the House yesterday, I should like to make a Statement on the decisions made yesterday at the meeting of the Members Estimate Committee which you convened, with the Prime Minister, the party leaders and the chair of the Committee on Members Allowances, and on the Prime Minister's proposals for a new parliamentary standards authority.
	First, I want to set out how we are dealing with the past and the immediate steps that we are taking in the present. At the meeting last night we agreed a process, proposed by the Committee on Members' Allowances, which will reassess Members' claims over the past four years and which will identify those claims which should not have been made and should not have been paid out because they were outwith the rules, and make arrangements for repayment. The public are entitled to see a process of reparation and Members are entitled to know that this will be orderly and fair.
	Secondly, on immediate steps, the House has already voted to ensure that the threshold for receipts has gone down from £25 to zero and voted to introduce full-scope audit under the National Audit Office. But, in addition to that, the MEC meeting last night agreed to an immediate ban on claims for furniture, a cap on interest payments for accommodation at the equivalent per year of £1,250 per month, a restriction on any changes to designation of main and second homes and preventing two Members who are married or living together as partners claiming more than one second home allowance. I understand that the MEC will meet later today to determine the detailed changes to the Green Book to put into practice the principles on which the party leaders and the MEC reached clear agreement. That should give immediate reassurance to Members of this House and to the public. But in order fully to restore public trust and public confidence, we need to have more than reparation and reassurance. We need renewal—to put in place a new system on a new footing. The House has already voted on 30 April to endorse the inquiry by the Committee on Standards in Public Life, which will come forward with its recommendations later on this year. Once again, I want to place on record my thanks to Sir Christopher Kelly and his committee for their work.
	At the MEC meeting last night all parties agreed to the Prime Minister's proposal that the keystone of any reform must be to switch from self-regulation to independent external regulation, and that we should end the gentleman's club approach, where we set and enforce our own rules, and instead bring forward proposals for a new parliamentary standards authority. The proposal on which we seek to consult would see Parliament legislate to delegate specific responsibilities to a new, independent parliamentary standards authority.
	The new parliamentary standards authority would revise and update the code of practice for Members of this House, investigate complaints where a Member of this House is alleged to have breached the code of conduct, take forward the implementation of the recommendations of the Committee on Standards in Public Life as to allowances, take responsibility for authorising claims for payment under the new allowance system, as well as disallow claims, be able to require payback of claims wrongly paid out, and be able to impose financial penalties.
	It is clearly appropriate that this new body also takes responsibility for these issues in the Lords, including administering and regulating the system for Peers' allowances, overseeing the code governing Peers' conduct and the Register of Lords' Interests, ensuring the highest standard of propriety and financial conduct, investigating alleged abuses of the system, and recommending any necessary sanctions.
	In this House, we recognise that the principle of self-regulation operates differently in the House of Lords. It is clear that extensive work and consultation will be necessary in order to ensure the agreement of the House of Lords to the effective transfer of responsibilities to the new body.
	But turning back to this House, disciplinary actions which might require sanctions, such as suspension from this House, which have a bearing on the ability of a Member to perform their work would remain, as at present, for the whole House, through the Standards and Privileges Committee. Only the electorate, or those who are themselves democratically elected, should be able to prevent a Member doing their work in this House.
	So we have set in place the actions for reparation and for reassurance. For renewal for the future, we look forward to Sir Christopher Kelly's proposals and we are further proposing that this House moves from a system of self-regulation to a system of statutory regulation. Although I know that it is hard to get a hearing on it now, I will, as Leader of the House, continue to argue both inside and outside this House that most honourable Members come into Parliament as a matter of public service and are hard-working, decent and honest.
	However, we must recognise that, even before the allowances revelations, there was a problem of public disengagement, public cynicism and a public sense of distance from Parliament, and we must now seize the opportunity to promote a debate that will see the proposals to change and to strengthen our democracy move from the margins to centre stage—where they ought rightly to be.
	Parliament and politics are important precisely because there are deeply held, different views about public policy and big choices, but there is consensus across all parties that we need to put the reputation of Parliament above reproach, and we will.
	I commend this Statement to the House".
	My Lords, that concludes the Statement.

Lord Strathclyde: My Lords, I thank the noble Baroness for repeating the Statement. It is not for us to intrude on the other place or to comment on the system that was operated under the authority of Mr Speaker, but it is a sad day to see that great House under such a cloud.
	My right honourable friend Mr Cameron has made it clear by his powerful leadership in this affair that he will brook no wrongdoing and expects the very highest standards from all members of this party in both Houses. I am glad to see that many of the suggestions first put forward by my right honourable friend are included in this Statement. The Government can be assured of full co-operation from this side in addressing this crisis, although I must say that the best and only way of cleansing Parliament would be an early general election.
	We cannot be complacent in this House. Change must come here, and it will come here. We cannot resist calls for openness and transparency, and we must accept accountability. We must review systems of remuneration, propriety and discipline; but serious issues arise from the different natures of the two Houses, and I am troubled that this may be forgotten in the dash to do something. Laws made in Parliament in a hurry are rarely good laws; laws made for Parliament in a hurry may prove to be no better.
	I am glad to see some acknowledgement of that in the Statement, although it seems to point two ways in that it says that a single authority must make rules for both Houses and, on the other hand, that your Lordships' House is different from the other place. The Houses are different. The other place is paid; your Lordships are not. The other House is representative; your Lordships' House is not. The other House had a complex expenses system costing almost £100 million a year, while your Lordships have a relatively simple allowance system costing £17 million a year. The other place is expected to be the primary employment of those elected there; for many Peers, what is called in the other place a second income is in this place your first.
	I do not say any of this to resist the change or any further inquiry—quite the reverse—but can the Leader of the House, who as a member of the Cabinet is in a unique position to speak up for the House, assure us that nothing will be done by the back door to make this House a facsimile of the other place? If, for example, a model of a full-time salaried Parliament emerged from this process, it would inevitably have implications for who we are and how we get here.
	Of course, none of us should harbour any illusions. There have been, and no doubt are, problems in this place, but their scale, nature and context are different from those of the other place and they may well require different solutions. The diversity of the two Houses of Parliament is one of the strengths of Parliament, and any regulator must understand that.
	Yesterday afternoon, the House Committee considered the question of allowances. It was decided—and many noble Lords will have seen the press release that was so swiftly issued—that there should be an independent external review of Members' allowances. However, if this is to be regulated by a new parliamentary standards authority, how will this House's review relate to that authority and how will noble Lords be able to contribute to it?
	On standards, the Leader of the House has convened a Leader's Group of senior Members of your Lordships' House to look into the code of practice and the register. I welcome that. But the Statement says that this will be the job of a new independent regulator. How will the Leader's Group relate to this body? Will it report to it? Will the new body be able to reject the work done in your Lordships' House on this question? In recent years, this House has worked hard right across the parties to develop a code of conduct and establish a register. Is that work now to be set aside?
	We are shortly to discuss sanctions on the basis of a careful and authoritative report from your Lordships' Committee for Privileges. The committee has policed and defended this House's good conduct since 1621. It has not done too badly, but how will the committee relate to the new body, and will it have to submit its reports to the regulator for approval? The authority of this House in regulating its procedures is not subject to interference by the courts. What will the status of the new regulator be, and is there a risk that inquiries will take longer, that conclusions will be less secure and, worst of all, that procedures may become tied up in legalism and open to challenge in the courts? These matters deserve careful consideration if we are not to end up with a more complex and costly system than we have now.
	Finally, can the noble Baroness expand on the next steps that the Government plan? Will there be a Green Paper or a White Paper? What is the timing for legislation? Will she accept that all of us have a duty to restore the good name of Parliament and that, in doing so, we must also maintain and develop its existing strengths?

Lord McNally: My Lords, in following the noble Lord, Lord Strathclyde, perhaps I can save the House some time by briefly saying that my party leader is wonderful too and that he, too, had a lot of good ideas. However, I follow the noble Lord in thinking that, in looking at the Statement and what follows it, it is very important that we see the distinctive position of the House of Lords and that we do not just find ourselves as an afterthought to decisions being made down the Corridor.
	There is a public mood that demands urgency and we certainly should respond to it, but in looking at the parliamentary standards authority, it is worth remembering that the Standards Board for England, which looks over local government, has not always been universally praised on carrying out its mandate. In appointing an overlord group, we have to be careful about the powers and relationships. Looking at it at first blush, particularly down that end of the Benches, are we really talking about the end of self-regulation for this House? As the Daily Express used to say, "I think we should be told".
	It is also interesting that in the paper itself a distinction is made that the new standards authority will in the Lords investigate alleged abuses of the system and recommend any necessary sanctions, but for the Commons it is clearly pointed out that any such recommendations would be a matter for the whole House. Even at that stage, we see slight differences in nuances between what the Commons sees as its responsibilities and what is likely to be imposed on us.
	On a wider matter, how much of this will be in the new Constitutional Renewal Bill, and when can we hope to see that? Finally, does the Lord President now accept that the Statement and the related matters surrounding it put the idea that we can postpone Lords reform into the next decade, which is the Labour Party's policy, or the third term of a Cameron Government, which is the Conservative Party's policy, quite in the realms of unreality? Surely the time has now come to use the last year of this Parliament to put the wider issue of constitutional reform firmly on the agenda and for the Prime Minister to redeem his early promise on a Constitutional Reform Bill by putting it at the front of the Government's legislation. They can deal with the economic crisis without legislation. The legislative time is there for a radical programme of constitutional reform, and the Government should take this opportunity.

Baroness Royall of Blaisdon: My Lords—

Baroness D'Souza: My Lords—

Lord Bassam of Brighton: My Lords, I think it would be wise for the convenience of the House to hear from the Convenor.

Baroness D'Souza: My Lords, I thank the noble Baroness the Leader of the House for repeating the Statement. While any and every mechanism to increase transparency and accountability is clearly to be welcomed, I, many Cross-Benchers and—I suspect—many others in your Lordships' House, have some concerns about the measures set out in the Statement.
	As has been said, the House of Lords is a separate legislative body with quite different roles and procedures reflecting its scrutiny role. The body to be set up, admirable as it is, might not be the appropriate one to oversee the work and conduct of this House. That is doubly so, as noble Lords have already said, in view of the agreement reached yesterday by the authoritative House committee to set up its own external and independent review on allowances. In addition to that decision, the House has not been slow in setting up another body, the Leader's group, thoroughly to review the code of conduct as it applies to the very different procedures of the House of Lords. The remit of those groups is to put forward options for the House committee to consider.
	Therefore, I ask the noble Baroness the Leader of the House to convey a message from the Cross-Benches, at least, as to the desirability of seeking some kind of compromise solution whereby the parliamentary standards authority will receive reports from the House of Lords but not be directly involved in regulating it. I am somewhat encouraged in that view by the small but apparent contradiction in the Statement that although the tasks of this new body are clearly stated, it also includes the sentence:
	"It is clear that extensive work and consultation will be necessary in order to ensure the agreement of the House of Lords to the effective transfer of responsibilities to the new body".
	I feel that to hand over regulation of this House may be too hasty and a precedent too far.

Baroness Royall of Blaisdon: My Lords, I am grateful to the three noble Lords for their broad support for the Statement which I repeated just now. I should say to the noble Lord, Lord Strathclyde, that it is true that Mr Cameron has been brooking no wrongdoing, but the Prime Minister has also been very firm in dealing with the members of my party who have breached the rules.
	The noble Lord, Lord Strathclyde, also mentioned a general election—something that I was expecting, as his party seems to be focusing quite extensively on that at present. Now is not the time to have a general election. It is Parliament that got us into this mess—parliamentarians of every party—and it is the responsibility and the duty of parliamentarians to clean up this mess before we go to the country on the subjects and issues that are important to it.
	The noble Baroness, Lady D'Souza, and the noble Lord, Lord McNally, mentioned that the two Houses are different and that therefore it seems difficult, if not inappropriate, to have one regulator. Yes, but we have one Parliament but two Houses of Parliament, so it is entirely proper to have one regulator and two systems. At the moment, we do not have all the meat on the bones of these proposals. These proposals will come before Parliament, so ultimately Parliament—we, sitting in this Chamber—can determine what this body will or will not be responsible for. I assure all noble Lords that in Cabinet I am very proud to be the voice of this House. I always strive to ensure that people understand the differences between us and the other place and that we are not an afterthought, although sometimes that is quite a task.
	This is a large-scale and significant change, but, as I say, it is for Parliament to decide on that change. The noble Lord, Lord McNally, and the noble Baroness, Lady D'Souza, mentioned the groups that are being set up. One will look at expenses. The other is the Leader's group. That has not been announced yet; there will be a Statement on that tomorrow. It is terribly important that the work of these two groups continues, because it will form the basis of whatever happens in the future. The Statement says that the new body will be responsible for,
	"administering and regulating the system for Peers' allowances".
	It does not say what that system should be; it says that it will administer and regulate. It also says that it will be responsible for overseeing the code of conduct, not making it. That is terribly important.
	A move to an independent regulator would affect many areas of the House of Lords' work on regulation, but the practice of self-regulation, such as the conduct of business in this House and the way in which this House manages its own affairs in the Chamber, will not be affected in any way. It simply will not be affected.
	Issues such as the Committee for Privileges involve extremely important details, but it is far too early to say what those are.
	How much will be in the Constitutional Renewal Bill? There is a discussion at present on how this legislation will come forth and in what form, and I am sure that that will be a matter for discussion with the other parties. As soon as I can give noble Lords further information, I will certainly do so.
	I should say to the noble Lord, Lord McNally, that I appreciate that there is quite rightly much talk at the moment about constitutional renewal. We are in a constitutional crisis, I believe, but on the doorsteps people are more interested in health and education than in the constitution. However, that is almost a personal comment.
	The noble Baroness, Lady D'Souza, suggested that it would be appropriate for the parliamentary standards person to receive reports but not to regulate. The person will be responsible for regulation, but we must clarify that when we come to the details.
	I think that I have answered most of the questions that have been put to me so far, and I look forward to questions from other noble Lords.

Lord Maclennan of Rogart: My Lords, does the Lord President not accept that Parliament cannot delegate its own responsibility for its own behaviour to any authority? If it tries to do that, it will simply further undermine public trust in itself. Does she not also recognise that, for too long, our democracy has lacked the bracing armature of a written constitution? The flexibility of our political conventions and the archaic justifications of inadequately accountable executive power are leading our country on a long, winding, downward path. Despite what she says about the doorsteps, the public are very well aware of that. We can and must arrest that decline with a careful, comprehensive and popularly endorsed programme of public political reform.

Baroness Royall of Blaisdon: My Lords, I hear what the noble Lord says about a written constitution; such views are long held by many Members of this House, and are things to be discussed. A written constitution is not on the table, but many issues relating to the constitution are in the forthcoming Constitutional Renewal Bill. The noble Lord is absolutely correct to say that Parliament cannot delegate responsibility for the behaviour of Members of either House. We are all responsible for ourselves, and we see from their behaviour that some Members of Parliament have let themselves down. However, in some cases the system is also at fault.

Lord Tyler: My Lords, I ask the Leader of the House to look specifically at the Statement made by the Chairman of Committees last night and give us some greater guidance about how the new,
	"independent external review of the financial support available to Members of the House",—[Official Report, 19/5/09; col. WS 112.]
	relates to the announcement that has just been made. What is the timescale for the exercise? Who will appoint the external adviser? Who will give the remit to the external advice process? What will then be the relationship back to your Lordships' House? As we all know to our cost, it is not the advice that is important but the action taken on that advice. Indeed, the other end of the building would not be in the sorry state that it was if successive Governments had taken the independent advice on the remuneration of its Members, instead of constantly putting it on a back burner and allowing the allowance system to take over instead. What will be the relationship between the advice given by the PSA, as I suppose that we will have to call it, and the exercise being set up by your Lordships' House?

Baroness Royall of Blaisdon: My Lords, yesterday's decision was taken by the House Committee. That committee will decide the process and procedure—very shortly, at its next meeting in June—on the basis of a paper from the Clerk of the Parliaments. However, I assure noble Lords that this House will be kept informed throughout and will be part of that process. As I mentioned earlier, the work of that new small body is extremely important, because it will relate to us as we are now. The new regulatory body will simply be there to administer and regulate, but it is up to us in this House how to take the new small body forward and whether we accept whatever proposals it might come forward with.

Lord Kilclooney: My Lords, the Statement on the parliamentary standards authority arises from the discussions yesterday by the leaders of the various political parties in the other place but, as has been mentioned, it has an impact and effect on the House of Lords. Were any of the groups in the House of Lords involved in that decision? Especially, was one of the largest groups in this House—the Cross-Benchers' independent group—invited to be involved?

Baroness Royall of Blaisdon: My Lords, yesterday, my right honourable friend the Prime Minister had discussions with Mr Clegg and Mr Cameron. I had a brief discussion with the noble Lords, Lord Strathclyde and Lord McNally, and the noble Baroness, Lady D'Souza.

Lord Barnett: My Lords, when did this House decide that there should be a regulatory body?

Baroness Royall of Blaisdon: My Lords, this House has not decided. The decision has not yet been taken. This proposal has been agreed to in essence by the party leaders, but there will be a legislative process. Therefore, in due course, it will be up to this House to say whether it wishes to have this new regulatory body.

Lord Roberts of Conwy: My Lords, Sir Christopher Kelly's committee is still due to report in the autumn. But am I right in thinking that if its recommendations do not include or are not based on a new parliamentary standards authority, they will be of no worth?

Baroness Royall of Blaisdon: My Lords, as I understand it, the proposals of Sir Christopher Kelly's committee will not relate to an independent regulator. Whatever proposals Sir Christopher puts forward will be implemented by the new regulatory body.

Lord Maginnis of Drumglass: My Lords, is it not ironic that the other place, which took such an interest in reforming this House—a House largely made up of people of vast experience who in life have done a real job before they have come here—has found a fall guy in Mr Speaker as far as this hiatus is concerned? Is it not time that the other place looked at the initial deceit from which the problems were derived; that is, the deceit that said that Members of Parliament are worth half of what a GP is paid, but that a trough would be created into which people could put their snouts to make up the deficit? That was a dishonest basis on which to expect the other place to function.
	Will any regulatory body understand the complexities of a House like this with experienced people, vis-à-vis the other place where a large proportion are boys and girls sent to do men's jobs—people without experience and without having made their way in life?

Baroness Royall of Blaisdon: My Lords, I feel rather old, if "them down there" are boys and girls. It would be inappropriate for me to speak of whatever happened at the other end. However, I agree with the noble Lord on one point. It is widely agreed that the system—whereby salaries down the other end were not put up as the SSRB recommended and, instead, there was a system of allowances—was enabled to implode. I am utterly confident that the new regulator will understand the needs of this place because we will ensure that we tell him or her of our needs.

The Lord Bishop of Lincoln: My Lords—

Lord St John of Fawsley: My Lords—

Lord Hunt of Kings Heath: My Lords, I think that the House wishes to hear from the right reverend Prelate.

The Lord Bishop of Lincoln: My Lords, I thank the noble Baroness the Leader of the House for her Statement. I should like to reassure the House of the continuing support and prayers of the Lords spiritual. Is the noble Baroness aware that over the past few months we have been affected, as have others, by the challenges to the integrity of both Houses, for different reasons? In terms of exercising our role in this House, the Lords spiritual clearly hold dearly to the principles that bring us and others here. We know that there are those who are being tarnished by guilt by association.
	We want the noble Baroness to be reassured of our continued support. Is she aware that we hold ourselves in readiness to be of whatever service we can to ensure that we can restore such as needs to be restored in order that this House and this Parliament can be of service to the country in such a way as we all wish and desire it to be?
	Is the noble Baroness aware of that wonderful comment by that illustrious political commentator, Groucho Marx, who said:
	"Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies".?
	I think I can say on behalf of the Lords spiritual that today's Statement goes some way towards not only diagnosing the situation correctly but also applying the right remedies. I thank the noble Baroness for the Statement and ask her to bear us in mind when it comes to being of service to her and others as the future unfolds.

Baroness Royall of Blaisdon: My Lords, these are turbulent times for us all. We are all grateful for the support and prayers of the Lords spiritual. I am confident that with this new independent parliamentary regulator, we will be assisted in diagnosing the right remedies.

Lord St John of Fawsley: My Lords, speaking as an honorary prelate, I suggest that it would be sagacious and acceptable to noble Lords of all persuasions to move on to the next business on the Order Paper.

Arrangement of Business
	 — 
	Announcement

Lord Bassam of Brighton: My Lords, taking that as my cue, I am sure that I need not say that we are about to consider a very important and serious piece of business. It may be helpful to the House if I say a few words at this point to outline how we envisage today's debate working.
	The usual channels have given very careful consideration to how today's debate should progress. We have taken the view that the best approach is to have one debate on the two Motions before the House to approve the reports from the Committee for Privileges. The debate will be opened and closed by the Lord Chairman. After the Lord Chairman has opened the debate, it will be normal for him to be followed by my noble friend the Lord President, the other leaders and the Convenor of the Cross Benches. After this point, any other noble Lord who wishes to speak should do so. Then the Lord Chairman will make a closing speech and will endeavour to answer any points raised. After the debate on the two reports, the House will be asked to make decision in sequence, approving each report and then approving the two subsequent Motions on sanctions.
	Finally, I should perhaps remind the House at this point that the normal rules of debate apply, as do our conventions on courtesy and conduct. Noble Lords should confine their remarks to the content of the reports before the House today.

Privileges Committee: First Report

1st Report: Privileges Committee

Motion to Agree

Moved By The Chairman of Committees (Lord Brabazon of Tara)
	That the 1st Report from the Select Committee (HL Paper 87) be agreed to.

Lord Brabazon of Tara: My Lords, the House is being invited this afternoon to agree two reports from the Committee for Privileges. The first report invites the House to agree to the committee's conclusion that the House has the power to suspend any Member who has been found guilty of serious misconduct. The second report contains the committee's conclusions and recommendations on the conduct of the four Peers who were the subject of allegations in the Sunday Times on 25 January. It embodies the findings of a detailed investigation by the Sub-Committee on Lords' Interests, which were then reviewed by the Committee for Privileges.
	We are debating these reports together. But I shall do my best to separate out the two sets of issues: the important points of general principle raised in the first report; and the questions of personal conduct covered in the second. However, I should make it clear from the outset that if the first report is not agreed to, I shall not be moving the Motion to agree the second report or the two subsidiary Motions on the Order Paper.
	The first report arises out of the Leader's letter to me dated 26 January, in which she asked if the Committee for Privileges could look into,
	"the question of any sanctions in the event that a complaint is upheld".
	We sought the advice of the noble and learned Baroness the Attorney-General. We are grateful to her for her advice, which is published in full with this report. Essentially, the Attorney-General advised caution. In particular, she advised in clear terms that the House did not have the power to expel a Member permanently, since to do so would,
	"interfere with the rights of a peer conferred by the Crown by letters patent".
	We fully endorse this conclusion in our report. As for temporary suspension, the Attorney-General acknowledged that the issue was "less clear", and that a "respectable argument" could be made that the House's power to regulate its own procedures does include a power of suspension. However, she advised that the "safer course" would be to wait until a legislative framework could be devised to confer such a power on the House.
	It may be helpful if at this point I say something in general terms about the role of the Attorney-General in relation to the House of Lords. As the Government's recent consultation paper on the role of the Attorney-General states, historically he or she,
	"was expected to officiate as adviser and attendant when called upon but without enjoying any responsibility in the Upper House's determinations".
	So once the Attorney-General's advice has been given, it is for the House, on the recommendation of its committee, to consider it and to decide whether or not to accept it. A decision not to follow the Attorney-General's advice will not be taken lightly, but the responsibility for the final decision rests with the House alone.
	The committee decided on this occasion, as it has done in the past, and in light of the Attorney-General's acknowledgement that a "respectable argument" could be advanced that the House had the power to suspend, to seek a second opinion. The noble and learned Lord, Lord Mackay of Clashfern, a member of the committee and, of course, a former Lord of Appeal in Ordinary, had already submitted a short note summarising his reasons for believing that the House did possess the power to suspend, and we therefore invited him to develop his initial note into the full memorandum which is annexed to the report. I would like to take this opportunity to thank the noble and learned Lord, Lord Mackay, not only for his formal written advice, which is printed with our report, but for his counsel throughout recent months.
	The noble and learned Lord, Lord Mackay, endorsed the Attorney-General's conclusion that expulsion would not be lawful. However, on temporary suspension, where the Attorney-General saw the arguments as balanced, the noble and learned Lord, Lord Mackay, advised very clearly that the House did have the power to suspend its Members. I will not try to summarise his arguments in detail, but in essence his advice was that the wording of the Writ of Summons implies the acceptance by Members of certain rules of procedure and conduct which are absolutely necessary if the House is effectively to perform its constitutional role as a Chamber of the legislature.
	I draw noble Lords' attention to the key paragraph in the advice of the noble and learned Lord, Lord Mackay: paragraph 38, on page 15 of the report. It states:
	"I consider that the House's existing power to adopt the procedures necessary to preserve 'order and decency' includes a power to suspend, for a defined period within the lifetime of a Parliament, a Member who has been found guilty of clear and flagrant misconduct. I consider further that the exercise of such a power would not affect the rights conferred upon Members by virtue of their letters patent; rather it would affirm the conditions implied in the writ of summons, that Members must conduct themselves in accordance with the rules of the House".
	The noble and learned Lord, Lord Mackay, also advanced a secondary line of argument, and I would like to draw Members' attention to the closing section of his paper, from paragraph 50 to the end. As recently as 1999, the Joint Committee on Parliamentary Privilege, while recommending that the House's power to suspend be "clarified and confirmed", stated in terms that the House of Lords,
	"has power to imprison indefinitely".
	As the noble and learned Lord, Lord Mackay, says,
	"the greater must include the lesser".
	The idea that the House has power to put a Member in jail, yet is powerless to impose a relatively short suspension, seems to me to be untenable.
	Moreover, as the noble and learned Lord, Lord Mackay, notes, the decision as to how the House imposes discipline on its Members,
	"falls within the undoubted privilege of the House to regulate its own procedures".
	In short, the committee was unanimously persuaded by the arguments of the noble and learned Lord, Lord Mackay, and concluded, therefore, that the House does have the power to suspend its Members.
	Until recently, many of us have felt that standards of conduct in the House were so high and "peer pressure" so potent that the House needed no sanctions for dealing with misconduct other than "naming and shaming". That was the view of the Committee on Standards in Public Life in 2000 and the view of the Committee for Privileges as recently as last year. But in light of recent events, we can no longer defend that position. We have to get our house in order. It is not just a matter of the conduct of the four Peers. The crisis facing the House has gone far wider than their conduct, and our response similarly must go wider. That is why I urge noble Lords, whatever their views on the second report and on the conduct of the four Peers, to agree the conclusions set out in bold on pages 4 and 5 of the first report, namely that the House has the power to suspend its Members for a defined period, not longer than the remainder of the current Parliament.
	I turn now to the committee's second report, on the conduct of the four Peers. Again, I must, on behalf of the House, express my thanks to the chairman and members of the Sub-Committee on Lords' Interests. The sub-committee was only appointed on Monday 19 January; less than a week later it found itself in the eye of the storm and engaged in probably the most arduous investigation of its kind ever undertaken by a committee of this House.
	I should also like to express our gratitude to the staff of the House, and I personally add my own thanks. An astonishing amount of work has gone into the reports that are before us today. It reminds us how lucky we are in this House to have staff of the quality that we do.
	As for the report itself, of course it is long, but I trust that noble Lords will have read it closely. It is accompanied by an even longer evidence volume. Everything has been published; the barest minimum, such as personal contact details, has been redacted. Again, I shall not attempt to summarise or paraphrase the report; it speaks for itself. However, I shall briefly set out the main conclusions and recommendations before closing with some more general comments.
	I turn first to the code of conduct itself. Much of the sub-committee's time, particularly in the initial stages of the investigation, was spent considering the meaning of certain specific provisions within the code of conduct. The first part of its report sets out its findings, and the Committee for Privileges, in paragraphs 15 to 35 of its report, confirms them. I invite all Members of the House to read the committee's conclusions carefully. Of particular importance is the third bullet point, which confirms that any Member who expresses,
	"a clear willingness to breach the Code of Conduct thereby demonstrates a failure of 'personal honour' and [is] thus in breach of paragraph 4(b) of the Code".
	The code of conduct is not just about registration and declaration of interests; it is about Members' conduct in their parliamentary duties, which includes the central requirement that Members should act on their personal honour. The no paid advocacy rule is another key provision against which the rest of the code must be read. The House, by agreeing the second report, will demonstrate that it is determined to ensure that the code of conduct is properly and rigorously applied and that it expects high standards of behaviour from its Members.
	As for the four Peers, with regard to the noble Lord, Lord Moonie, the sub-committee concluded that there was insufficient evidence to establish that he had expressed a clear willingness to breach the code of conduct. It is clear that some of his comments to the undercover journalists were inappropriate, and he has been invited to make a personal statement of apology to the House, but the report exonerates him of breaching the code of conduct.
	Secondly, with regard to the noble Lord, Lord Snape, the sub-committee concluded, on balance of probabilities, that he had expressed a clear willingness to breach the code of conduct, and therefore found that he had failed to act on his personal honour. The Committee for Privileges, having considered the appeal of the noble Lord, Lord Snape, reversed this decision. While clearly he spoke loosely and used inappropriate language, as I think he would acknowledge, we were not persuaded that there was a clear willingness to breach the code. We accordingly exonerated him while recommending that he, too, should make a personal statement of apology to the House.
	Finally, I turn to the cases of the noble Lords, Lord Truscott and Lord Taylor of Blackburn. In both cases the sub-committee found that they had expressed a clear willingness to engage in paid advocacy, and concluded therefore that they had failed to act on their personal honour. The Committee for Privileges unanimously endorsed these findings. In the case of the noble Lord, Lord Truscott, the sub-committee stated that,
	"the evidence against Lord Truscott is so clear and plentiful that we have little doubt that Lord Truscott was advertising his power and willingness to influence Parliament in return for a substantial financial inducement".
	In the case of the noble Lord, Lord Taylor, the sub-committee found that his conversations with the journalists,
	"display his clear willingness to breach the Code of Conduct by engaging in paid advocacy".
	Indeed, the claims of the noble Lord, Lord Taylor, to the undercover journalists regarding his past achievements were so outrageous that the sub-committee concluded either that,
	"he had breached the Code in the past and was agreeing to breach it again",
	or that he was spinning a story, falsely suggesting that he would breach the code in future,
	"in order to secure a lucrative contract".
	Either way, he failed to act on his personal honour as required by the code.
	The appeals made by the noble Lords, Lord Truscott and Lord Taylor, against the sub-committee's findings entirely failed to persuade the Committee for Privileges. We found them by turns misguided and implausible. We therefore upheld the findings of the sub-committee in full.
	This episode has done serious damage to the reputation of the House. We all have responsibility, individually and collectively, to uphold that reputation. That is why personal honour remains the cornerstone of the House's code of conduct. The noble Lords, Lord Truscott and Lord Taylor of Blackburn, have not, we believe, acted on their personal honour.
	I know that one or two noble Lords may be concerned about a guidance note that was issued to the four noble Lords at the start of the investigation, to the effect that the House had no power to suspend its Members. This was standard guidance drawn up last year and subsequently published online. It is clear that the guidance, in stating this view without any qualification, was inaccurate. That is extremely unfortunate, but the fact is that, even as recently as last year, no one could possibly have anticipated the seriousness of the allegations that were made against the four Peers.
	That is why the committee has had to look again at the powers of the House and has reached the conclusion set out in the first report. In particular we have concluded that the House has, and has always had, an inherent power to discipline its Members, and that the means by which it chooses to exercise that power falls within the regulation by the House of its own procedures. In accordance with that conclusion, we therefore recommend that the House should suspend the noble Lords, Lord Truscott and Lord Taylor, from the service of the House until the end of the current Session of Parliament.
	I commend these two reports to the House, and I beg to move that the first report be agreed to.

Baroness Royall of Blaisdon: My Lords, we are today at a dark moment for our Parliament and our democracy. The standing of Parliament is diminished, the reputation of parliamentarians is degraded, the trust that people place in Parliament and parliamentarians has sunk like a stone and people's disgust with Parliament is palpable. Politicians have plunged Parliament and politics to the low at which we find ourselves. Democracy requires the consent of the people for it to function, but we stand at the point where the risk is that we as politicians no longer have the consent required. As a result, not only are our politics, our politicians and our Parliament stained but our very democracy is in danger.
	Our job as politicians and parliamentarians is clear and our duty is obvious; we have to acknowledge that we have not been doing our job properly, apologise for what we have done, make radical changes to ensure that there can never be any repeat and, whenever it comes, await the judgment of the people. As a politician and a parliamentarian, I do not exclude myself from this. We politicians have not been doing our jobs in a way that people would want us to: with honesty, integrity and honour. I am sorry for that, and we all have a clear responsibility to do what we can to set right the wrongs that have taken place.
	It is for the Commons to deal with the bulk of these issues, and this week's events have shown that they are doing so. We have seen the Speaker of the other place announce that he is stepping down, and we have just debated a Statement setting out proposals for extensive reform of both this House and the Commons—crucially, a proposal to consult on a move from a system of self-regulation to independent external regulation. In this House, we announced yesterday that we are commissioning an independent external examination of financial support for Peers including allowances. This and other initiatives are significant steps, and I hope that they will help move Parliament as a whole towards a much better way of handling its affairs in these areas.
	There remain particular issues, however, for this House to address and wrongs for it to right. We have before us two reports, as set out for the House by the noble Lord, Lord Brabazon of Tara. I said to the House last week when we published these reports that I trusted, and knew, that the House would discharge properly the obligations that the reports placed upon it. Now is the moment for us to do so.
	I shall address the three issues posed by the reports: first, the question of the sanctions available to this House, which is the subject of the first report; secondly, the conduct of the Members of this House who are the subject of the second report into the allegations made against them by the Sunday Times on 25 January; and, finally, the committee's conclusions and recommendations in relation to those Members.
	On the reports and recommendations on sanctions available to the House, I recognise that the report presents Members with a particular issue: it makes clear that this House has powers that Members may not have realised that it had. Some Members have come to me with a copy of the Companion in one hand, looking in the index in vain for the word "suspension". Some have been surprised, therefore, that this House has, and has long had, the power to suspend Members.
	I understand that point of view and have some sympathy with the perception, but the argument that the Committee for Privileges has put forward in its report is clear and compelling. It concludes that the House does have, and has for long had, the power both to discipline its Members and to suspend them for no longer than the remainder of the current Parliament. The committee had considerable assistance from the noble and learned Baroness, Lady Scotland, the Attorney-General, and from the noble and learned Lord, Lord Mackay of Clashfern, the former Lord Chancellor. I am grateful to them for their advice.
	The House has heard the points made in relation to that advice by the Chairman of Committees, the noble Lord, Lord Brabazon of Tara, in moving the Motion. The committee had two respectable views before it; one from the Attorney-General, which presented us in essence with a choice, and the other from the former Lord Chancellor. The committee decided on balance that, for the reasons advanced by the former Lord Chancellor, the House did have, and for long has had, the power to suspend a Member for a period within a Parliament on the grounds of misconduct.
	This House will take a view on the powers in this area. I hope that it will agree with the report of the Committee for Privileges in relation to the sanctions that it has available, and I strongly urge and recommend that it does so. However, the report also makes it clear that the House has no power by resolution to expel a Member permanently. My right honourable friend the Secretary of State for Justice said at the time that the allegations were originally made that the Government would if necessary bring forward legislation on this issue, a point made on subsequent occasions to this House by my noble friend Lord Bach.
	I now come to the second report of the committee. The material issues there are in relation to the conduct of Members of this House and whether their behaviour constitutes a breach of this House's code of conduct. Before I address those issues, I turn to the conduct of the Sunday Times newspaper. From the moment at which my office and I became aware of the Sunday Times allegations, which was on the Friday before the Sunday on which they were published, this House has rightly treated those allegations seriously. At no point did we try to dismiss them or suggest that they were without foundation. Indeed, we did the opposite. On the very day that the allegations were published, I wrote to the noble Baroness, Lady Prashar, asking her as chair of the sub-committee to investigate them, a point that I was able to reinforce formally some weeks later once the police had made it clear that they did not intend to mount an inquiry into the complaints that they had received in relation to the allegations. I was then able formally to become the complainant to the sub-committee. It is precisely because we have taken these matters seriously and have continued to offer the Sunday Times assistance with legitimate inquiries in line with the other media outlets that I am able to comment further on the behaviour of the Sunday Times.
	Like other media organisations and other journalists in similar situations, the Sunday Times claims that the subterfuge of its journalists in masquerading as public affairs consultants who sought to recruit Peers to table amendments on behalf of a commercial client was necessary to demonstrate something which it believed could not be demonstrated in any other way; classically, that the ends justified the means.
	I am aware that many Members of this House disagree profoundly with this view. They regard the subterfuge deployed as deceit; they regard the masquerading as something rather more simple—lies; and they regard the action of the Sunday Times as entrapment. I can certainly see the force of those views, especially in the light of the Sunday Times's recent pursuit of Members of this House, which some might regard as proper investigative journalism but others regard as the journalistic equivalent of stalking. I can see why such views are so strongly held by a number of Members of this House.
	Some Members accordingly believe that we as a House and I as its Leader have given too much weight and credence to the allegations made by the Sunday Times. They point out with some force that the allegations are exactly like the "cash for questions" allegations, made again by the Sunday Times, about Members of the other place a decade or so ago—they are exactly like them, in fact, apart from the fact that, in this case, no cash changed hands and no amendments were tabled. But the value of the report that we have in front of us is precisely that it is not a piece of journalism, however noble or ignoble that may be, but a serious and sustained examination of, and inquiry into, a set of journalistic allegations.
	Having considered the issues scrupulously and thoroughly, including the examination in person of all the Members who agreed to appear before the inquiry, the sub-committee came to its conclusions. The Committee for Privileges considered the findings of the sub-committee and considered, too, any appeals lodged by Members. As the complainant, I absented myself from any consideration of the appeals; the committee then accordingly made its recommendations, including in one case accepting one of the appeals. I fully concur with the conclusions of the committee of which, as Leader, I am a member. Its conclusions seem to me appropriate, fair and just; accordingly, they seem to me to be conclusions that this House will wish to endorse.
	Thirdly, I turn to the penalties that the committee is considering. The committee is inviting two of the Members concerned to make personal statements to the House; I hope that the House will agree that this is an appropriate course of action and, if that were to be the decision of the House, I trust that the Members concerned would want to do no other than carry out what the House has decided.
	In the case of the other two Members of the House, the penalties proposed arising from, but not linked to, the recommendations that the committee is making on the sanctions available to the House, including suspension, are rigorous. They are severe; they are tough. However, in line with the outcome of the investigation, I believe that they are also appropriate, fair and just. I know that some Members of this House would prefer less exacting penalties; I know, equally, that some Members would prefer even more considerable penalties. I believe that the committee has struck the right balance in the penalties that it recommends.
	Much has been made of the fact that the proposed penalties for the two Members found by the Committee for Privileges to be in breach of the code of conduct would, if approved by the House today, mark the first suspensions of Members of your Lordships' House since the time of Cromwell. Just as the revelations of the past 10 days in relation to the other place may mark historic changes, so do we in this House stand at an historic moment. I believe that this House wants to see justice done for the Members of this House who have been found by the Committee for Privileges to be in breach of the code of conduct. I believe that this House wants to see a fair and just settlement and that such a settlement in the cases before us is there in the conclusions and their associated penalties that the committee proposes.
	I believe, too, that the House wants to see justice done for itself and for the Members of this House more widely. During the course of this long process of inquiry, which is due to conclude today, Members of this House felt damaged and diminished by the conduct of Members of this House. I have had Members of this House come to me, as I am sure have other leaders from all parts of the House, and tell me what that has at times meant—being shouted at in the street, and their spouses reluctant to go into their local communities because of what people were saying, and Members' sense of their own standing being demeaned and their reputations cut to ribbons.
	I am proud of this House—proud of what it does, proud of how it does it, proud to sit on these Benches, and proud to be the Leader, and the servant, of this House. But I am saddened when the reputation of this House is sullied. I know that Members on all sides of this House have felt stained and ashamed at the disrepute to which this House has been brought. Shakespeare, of course, has the definitive word. Cassio, Othello's loyal aide, catches the issue precisely when he tries to explain to the villainous Iago, who has manoeuvred to discredit him, what loss he has endured:
	"Reputation, reputation, reputation! O, I have lost my reputation! I have lost the immortal part of myself, and what remains is bestial".
	We have not, I believe, descended into the level of the beast. Indeed, if we take the right decisions—the decisions that the committee is recommending—I believe we can now start on the rebuilding of our reputation which this incident requires. Parliament is a building block of our nation, but the reputation of Parliament and parliamentarians is at stake. The honour, the integrity and the honesty of Parliament and parliamentarians is at stake, and the trust people have in Parliament is at stake. Make no mistake—we have a role to play; we have duties and responsibilities to discharge for the people whom we are here to serve. The moment is now to start on that task, and I urge this House to seize that moment, to make that start and to begin our part in the rebuilding of our Parliament and our politics. That is what our democracy requires.

Lord Strathclyde: My Lords, clearly, this is an extremely difficult day for this House. The allegations made against four Members of this House, whatever you think of the methods involved in securing the evidence, were grave. It was right that the allegations were published. It was in the public interest that they should be. Having seen the allegations, the noble Baroness the Leader of the House, whose leadership in this affair has been decisive and effective, referred them to the Sub-Committee on Lords' Interests.
	That was the appropriate action in a self-regulating House. The sub-committee convened within hours. It contacted the four Peers concerned the same day. Anyone who read the report of the sub-committee, who has studied the volume of evidence that it had to review and the transcripts of its many meetings, cannot but express respect and gratitude to the members of that sub-committee chaired by the noble Baroness, Lady Prashar, or the thoroughness and fairness with which they conducted their investigation. I also express my thanks to the Clerks of the House for the exemplary service given to the sub-committee and to the Committee for Privileges.
	As a member of the Privileges Committee, I do not presume to speak for all my colleagues, but I can assure the House that every member of that committee treated both the report of the sub-committee and the appeals that were presented with the utmost objectiveness and care. Let it not be said by anyone, inside or outside the House, that those who were the subject of these allegations and findings were not fairly heard and objectively judged. I sincerely trust that we will have no statements inside or outside this Chamber suggesting otherwise.
	As has been said, as well as considering the findings of the sub-committee, the Committee for Privileges had to consider sanctions and what penalties are available to the House in dealing with such matters. The committee considered the most useful advice given to it by the noble and learned Baroness the Attorney-General, for which we were exceedingly grateful. We also had the benefit of a learned paper from my noble and learned friend Lord Mackay of Clashfern. Having considered the opinions carefully, the Committee for Privileges decided unanimously that your Lordships' House has every right to require all noble Lords to conduct themselves in accordance with the orders, rules and standards of the House, and an inherent power to enforce conformity with them.
	This House has the right to fine and even to imprison its Members. This was reaffirmed as recently as 1999. The Privileges Committee considered carefully if it also has a right to suspend Members from the service of the House. It concluded unequivocally that it has. I urge the House to accept that advice.
	The argument before us is that to suspend would interfere with the right of a Peer to sit and vote in Parliament. The Companion has for years advised us that Peers should be especially cautious before speaking on matters where they have direct interests shared by few others. Is that unlawful? Our Standing Orders contain provision for a resolution that a noble Lord "be no longer heard". Is that unlawful? Section 4(d) of the code of conduct forbids Peers who have a pecuniary interest from voting on a Bill or Motion, or from promoting anything. Is that unlawful?
	Noble Lords have a right to be here by virtue of a Writ of Summons, but surely your Lordships have the power—indeed, the duty—to regulate the behaviour of Members. A House that fines or imprisons its Members must surely be able to exercise a power to suspend. It may be said that this power has not been used since the 17th century, but the fact that it was used then means that it pre-dates the resolution of your Lordships' House in 1705 which resolved that no new privilege could be created by resolution. No new power is being created today. There is therefore no retrospection and no manufactured new sentence. In these extraordinary times, we have seen in another place action being taken that has not been taken since 1695. I do not hear anyone saying that that was out of order for that reason.
	No one raises an eyebrow when an errant Member of another place is suspended; I see no reason why we should not use our power to do so here. The noble Lord the Chairman of Committees and the noble Baroness the Leader of the House have introduced the reports before your Lordships. I will not repeat what they have said; their recommendations and the reports speak for themselves. I believe that all four of the Peers concerned fell short of the highest standards the House and the public are entitled to expect. In the case of the noble Lord, Lord Taylor of Blackburn, the Committee for Privileges found a clear willingness to breach the code of conduct by engaging in paid advocacy. In the case of the noble Lord, Lord Truscott, the committee found that the evidence was so clear and plentiful that it concluded the noble Lord was advertising his power and willingness to influence Parliament in return for a substantial financial inducement. Both noble Lords were willing to breach the code's prohibition on paid advocacy and both had failed to act—as the House expects of all of us—on their honour.
	These findings make a sad conclusion by the committee. It is an unhappy conclusion, but it is also, in my judgment, a fair and just one. The public expect that this House will react with firmness and unity to show its abhorrence of wrong-doing and any propensity to it. I therefore commend the reports to the House, and I will support the Motions before us this afternoon.

Lord McNally: My Lords, I echo the tribute that the noble Lord, Lord Strathclyde, has paid to the Lord President. I do not think that any Leader of the House could have been more tested by fire than she has been in trying to deal with this matter. The House is in her debt for the way in which she has led us through it.
	Forty-three years ago I sat in Central Lobby, waiting to be interviewed by Arthur Skeffington MP for my first job as assistant general secretary of the Fabian Society. I still remember the sense of awe I felt for this building and what it stands for. In the four decades since, I have had many roles but I still enter this building with that same sense of awe, combined these days with a sense of privilege at being able to serve here. Therefore, I approach this debate with a sense of duty and responsibility, but also sadness. Sitting in judgment on friends and colleagues is never pleasant. Indeed, there may be some sitting here today who, having read the transcripts of evidence, are thinking, "There, but for the grace of God, go I". For let us be clear, what we are dealing with here is a case of entrapment, not of exposure. It is important for the public to understand that the Sunday Times, with all the resources of its insight team, could not find a single example of a Peer who was actually paid for getting an amendment passed. The reason for that is very clear. In this House—this is one of its strengths since 1999—no single party, let alone a lone Peer, could amend a Bill in this way. If you ask, "What about the claims made by Lord Truscott and Lord Taylor?", I would reply that it is there that they failed to act on personal honour by allowing a salesman's hype to get in the way of the truth.
	The fact that they were willing to sell their services in the first place is enough to condemn them in the eyes of some. However, I put that matter into context. When I came into this House in 1996, I was employed by a company which involved itself in lobbying. I appeared before the noble and learned Lord, Lord Griffiths, and his committee and the rules as drawn up reflect the evidence I gave at that time. It was recognised that there was a difference between advice and advocacy. However, it also recognised that it was proper for noble Lords to offer themselves as public affairs advisers and many have, and still do. We could, of course, draw up far more draconian rules and ban advice as well as advocacy, as does the American Senate, but such rules would have to include the work of law firms and accountancy firms, and others who offer public affairs advice in their capacity as non-executive directors or members of advisory boards.
	I have gone into this background in some detail because the noble Lord, Lord Truscott, calls me in aid by name in his appeal. What he says is true. I have long argued that our rules on lobbying are too vague for modern circumstances and include many grey areas in terms of personal behaviour. But it is too easy simply to say that the rules should ban lobbying. Show me a parliament without lobbying, and I will show you a parliament without power.
	The key to this matter, as in so much else at present besetting us, is transparency and accountability. The three professional bodies overseeing lobbyists and lobbying companies are in the process of creating a single umbrella organisation for the industry. I hope that Parliament will respond to that by entering into urgent discussions with the new body to create clear and enforceable rules of conduct which will be embodied in the codes of conduct of lobbying firms and Parliament. This could well involve a bar on paying parliamentarians for their advice.
	In this, as in other matters, we have to face the fact that we do not receive a salary, and many noble Lords have to earn a living outside the House. Unless we are content to have this House comprised of men and women of independent means living within the M25, we will have to face up to the reality that all noble Lords who earn a living outside the House risk the danger of straying into the grey areas to which I have referred. That is why I welcome the Leader of the House setting up a review of our codes of conduct, and these should be looked at in terms of those who work outside the House.
	These points about entrapment and the grey areas in our present rules are, in part, an explanation of why the Privileges Committee restricted the findings to a breach of paragraph 4(b) of the code—a failure to act on personal honour. We were right to do so, and I hope the House and the four individuals concerned will accept the findings when we vote at the end of this debate.
	On the matter of the report before us on the powers of the House, it is some measure of the difficulty we faced and had to grapple with that we had to go back four centuries to determine our powers. We were immensely indebted to the Attorney-General and the noble and learned Lord, Lord Mackay of Clashfern, for their advice. I have no doubt that we came to the right conclusion, and I hope that the House today will endorse the conclusion contained on pages 4 and 5 of the report. To do otherwise would validate the rather unwise words of noble Lord, Lord Moonie:
	"there's virtually nothing they can do".
	If that were to be proved true by us rejecting the report on powers we would quite frankly become a laughing stock.
	I am aware that some noble Lords will argue that by asserting the right to suspend, the Privileges Committee has moved the goal posts. The guidance notes sent to the four Peers did say that,
	"the House has no power to suspend or expel a Member"
	As the report clearly demonstrates, that advice was wrong. The House will have to listen to the arguments in deciding whether or not that wrong advice irretrievably polluted the process. For my part, it seems a bit rum to say, "My defence would have been different if I had thought the consequences were different". Anyone reading the evidence—I echo the noble Lord, Lord Strathclyde—will see that the sub-committee bent over backwards to be fair, as did the Privileges Committee in receiving the sub-committee report and the appeals of the four Members.
	So I am urging noble Lords to approve both reports and the actions they recommend. Like other speakers, I put on record my profound gratitude to the noble Baroness, Lady Prashar, and her colleagues, and to the staff of this House. But, as the Lord President indicated, this cannot be the end of the matter. Each and every one of us has to act on personal honour to uphold the honour of this House. This means action this day in voting for the report before us. It means urgent action to clarify the rules governing lobbying and lobbyists—if possible by working out a sanctions-backed code with the new industry body now being established, and a register of lobbyists working in Parliament and their clients.
	It means dealing with equal urgency with the allowances regime, which is also vaguely drawn and lightly policed. The House Committee took some steps in that direction yesterday. We should also bring forward the review of the role of the Lord Speaker to see whether that role in protecting the reputation of the House can be strengthened.
	Finally—and I make no apology for returning to it—this House has to accept that the next stage of reform cannot be postponed until some time in the next decade. If there is a change of Government, it is likely that the notional membership of this House will rise above 800. I do not believe that the public mood is for accepting such a situation. There is still time in this Parliament to bring forward the reforms, as we discussed earlier.
	As I have said, I have now been around this building for 40 years. I love it and what it stands for. I still believe that those who serve here at both ends of the building are, in the main, motivated by a commitment to worthy ideas and ideals and that our public life is still relatively free of corruption. However, protecting that honour requires eternal vigilance and, where necessary, firm action. We are at such a defining moment. Although Parliament has suffered damage, its foundations go deep and its walls are strong. Yesterday, the Prime Minister said that Parliament could no longer be run like a gentleman's club. He is right, and our decisions today will be the clearest indication that the House of Lords has received that message loud and clear.

Baroness D'Souza: My Lords, we live in a world of euphemisms—extraordinary rendition, collateral damage and quantitative easing—but I suggest that the word "honour" still has the same currency that it has had for hundreds of years. Moreover, it is fairly straightforward to translate the concept of honour into actions. Your Lordships have the additional guidance of both the Nolan principles, to which all those in public service sign up, and the code of conduct, which applies specifically to your Lordships' House.
	Thomas Jefferson rightly said:
	"When a man assumes a public trust, he should consider himself as public property".
	There is an obligation on each and every Member to uphold the dignity of this House and to be seen to be doing so. Why is that so important? It is generally acknowledged that in recent years this House has performed an increasingly decisive democratic role in scrutinising legislation and holding the Government of the day to account. It is also rather widely felt that this role is both essential and well acquitted by your Lordships. The tragedy of the events described and painstakingly analysed in the two reports that we are debating today is that the democratic role may itself be judged to be inadequate and that the work of the great majority of this House's Members will likewise be denigrated. Not only is this painful for all of us but it has constitutional significance. There is a huge task ahead of building public confidence. Public fury and disenchantment cannot be underestimated.
	In Parliament, as a bicameral legislative body, there is a specific role for this House. We are now embarked on a programme to educate the wider public in informal and formal ways about not only what is achieved in this House but what measures are now being taken to ensure future transparency. We would do well to remember that a peerage is for life. We are not subject to a five-yearly public audit, and that is all the more reason to have strong codes—even stricter perhaps than those that operate in the other place. The two reports are part of that process and will be judged by the fairness with which those accused of breaching the code of honour have been treated, as well as the efforts that have been made to impose appropriate sanctions.
	The House is an ancient institution, as are its powers, and these, it seems, have not fallen into desuetude. The media may discount the care with which these events have been dealt with and the punishment proposed. However, I think that we know and accept that the Sub-Committee on Lords' Interests and the Committee for Privileges have considered the cases individually and in depth, and that sanctions, although severe, are indeed appropriate.
	Finally, I add my thanks to all those staff who have been engaged in the enormous amount of work involved in producing these reports. I also thank the members of the Sub-Committee on Lords' Interests and my colleagues on the Committee for Privileges for the care, balance and tolerance that they have shown in arriving at their decisions, which I very much hope will be accepted by the whole House today.

Lord Lloyd of Berwick: My Lords, near the start of what will be a long debate, I shall, if I may, say a very few words about the point of law on which the noble and learned Baroness the Attorney-General and the noble and learned Lord, Lord Mackay, have expressed different views.
	They both agree that there is no power to exclude a Member permanently. They both agree that the House has power to regulate its own procedure. The only question that divides them is whether that power includes a power to suspend. The Attorney-General argues in paragraph 14 of her memorandum that the power to suspend is outside what she calls the mere regulation of our own procedures. In my view, the power to regulate our procedure goes wider than she implies.
	The House, like any other body, has power to make rules for its own governance. Like any other body, it must have power to enforce those rules. In the case of the most serious breaches, suspension for a limited period would seem to be the common-sense answer, unless that is excluded for some reason. The Attorney-General argues that it is indeed excluded because it is inconsistent with a Member's right under his Letters Patent to sit and vote in Parliament. But that right is not absolute. It is a right that depends for its exercise on the Member receiving a Writ of Summons. The writ itself imposes certain duties on Members, including by implication a duty to obey the rules of the House.
	It follows, in my view, that the power of the House to impose sanctions for breach of its rules, including a power to suspend, exists and has always existed by necessary implication in the Writ of Summons. I would take that view even though that power may never have been spelt out until now, and even if it had never been exercised. The Attorney-General also argues that the power to suspend is excluded by a binding resolution of both Houses of Parliament in 1705. I am not sure in what sense that resolution can be said to be binding, having regard to the constitutional principle that no Parliament can bind its successors. Putting that on one side, I cannot agree that by asserting now a power to suspend Members for breach of the rules of the House, the House is thereby creating for itself a privilege in any ordinary or indeed, in any possible sense of that word. If it is creating a privilege it is, for all the reasons I have mentioned, not a new privilege.
	Finally, the Attorney-General draws attention to a view expressed by the then Clerk of the Parliaments in 1998 in evidence before the Joint Committee on Privileges. Any view coming from that source is entitled to the greatest respect. I have looked at that report and its predecessor, but we should not regard ourselves as being bound by that view, especially as the committee itself reached no conclusion one way or the other. It follows that I agree with the views more fully, and I suspect much more accurately, expressed by the noble and learned Lord, Lord Mackay, and summarised so well in paragraph 8 of the report. There is only one very small respect in which I would venture to disagree with the noble and learned Lord, when he says in paragraph 36 that he would expect the period of suspension for breach of the rules to be relatively short. He was not of course talking about this particular case, and nor am I. But I can imagine cases of a serious breach occurring near the beginning of a Parliament in which the suspension of the Member would be longer, perhaps very much longer, than is possible in these cases.

Baroness Mallalieu: My Lords, perhaps I may detain the House briefly with a matter that has already been raised by the noble Lord, Lord Brabazon, and others. It relates to the advice given to the four Peers before and indeed during the committee's sitting. These are matters of which many noble Lords may be unaware and the references made in those speeches were, if I may say so, dealt with very lightly, and do not give the full picture. It may assist the House to have just a little more background.
	In January, before the Committee for Privileges sat, as I understand it, each of the four Peers, but certainly the noble Lord, Lord Taylor, was sent a letter from the noble Baroness, Lady Prashar, accompanied by the code of conduct and by a document that is now in the Printed Paper Office—I know that it was not earlier when other noble Lords were asking for it—headed, Guidance for Members of the House of Lords against whom a Complaint is made. Paragraph 6 of that guidance note states in the clearest possible terms:
	"The House has no power to suspend, expel or fine its Members. If a complaint is upheld, therefore, the only sanction available to the Sub-Committee and the Committee for Privileges is to bring the conduct of the Member concerned to the attention of the House".
	It then continues to describe other matters that relate to failure to declare interests. That was the guidance that each of those four Peers received before they were summoned before the committee. That guidance has been dismissed as wrong, but it was of course wholly in accordance with the advice that the noble and learned Baroness, Lady Scotland, gave subsequently, which was that there was no such power to suspend. No doubt whoever drafted the guidance did so on the basis of that position.
	I know that the noble Lord, Lord Taylor, handed those documents to his legal advisers and took their legal advice, which was based, in part, on that guidance. As a result, he did not himself give evidence before the committee, although he was represented. As we have heard, there was the later, detailed advice from the noble and learned Lord, Lord Mackay, and now a suspension is recommended to this House in two cases as a result of that advice being accepted by the committee.
	That advice may be right, it may be wrong. It is for your Lordships to make up your minds. I am not a constitutional lawyer and I do not propose to try to argue one way or the other. I listened carefully to what the noble and learned Lord, Lord Lloyd, just said. What was undoubtedly the position was that the noble Lord, Lord Taylor, did not know of that advice until after the report was published. Indeed, it is not clear to me from the few members of the committee to whom I have spoken whether they were made aware of the guidance that had been sent to the four Peers beforehand.
	As a matter of natural justice and fairness, surely it cannot be right to start what was in effect a disciplinary procedure on one basis, conduct the proceedings on that basis and subsequently change tack, so as, in effect—I deliberately use these words—to impose a retroactive punishment. Certainly one of the noble Lords took advice based on the guidance given by this House. Whether he would have given evidence or not otherwise, I clearly do not know, but it seems that there has been a breach of natural justice in the procedure adopted that could lead to an extremely embarrassing legal challenge subsequently, if we proceed to suspend.
	It may be that we disregard natural justice in relation to matters about which we feel particularly strongly; I hope that we do not. It may be that although the European Convention on Human Rights makes it clear that we are entitled to a fair trial, sometimes the greater political need causes us to be blind to that. I urge the House to be very slow indeed in rejecting paragraphs 14 and 15 of appendix 1 to the report in which the noble and learned Baroness, Lady Scotland, urges caution. There are many ways in which we can expel people from this House in ways that do not involve the word expulsion. We can, for example, invite them to take leave of absence. We can also, if they insist on coming, move that they are no longer heard. We have many ways of making this House's displeasure known.
	We have come here, all of us, with heavy hearts, to try to protect the integrity of a place about which we care greatly. That is all the more reason, in an atmosphere packed with emotion, that we should get it right. If we suspend, having told these four Peers in advance that that was not going to happen, it seems to me that we are running a grave risk of breaching natural justice, which we want to see preserved.

Lord Lester of Herne Hill: My Lords, the advice of the noble and learned Lord, Lord Mackay of Clashfern, is of great constitutional significance, and, having heard the speech of the noble and learned Lord, Lord Lloyd of Berwick, it would be presumptuous of me to say anything more than that I respectfully agree. I therefore need say nothing more about the first report of the Committee for Privileges, except that I hope the House will agree with it and endorse the advice of the noble and learned Lord, Lord Mackay.
	The second report deals with the conduct of the four Members of the House. I shall deal in a few moments with the plea in mitigation which the noble Baroness, Lady Mallalieu, has just made and with which I profoundly disagree. That report deals with the fairness of the procedures of the sub-committee's report, with the interpretation of the code and with the conduct of the Members found to have breached the code.
	The sub-committee is not a court of law and has not determined any criminal charge. Nor has it determined any civil right. It has performed its role as a disciplinary body acting on behalf of the committee and the House under the House's extensive and essential powers of self-regulation. In doing so, the sub-committee and the committee as a whole have acted independently and impartially, with conspicuous fairness, in accordance with the fundamental principles of natural justice, and with scrupulous care as to the evidence. Because the committee and the sub-committee have not determined a criminal charge or a civil right of any Member of the House, it is quite clear that there is no question of any breach of the European convention. If the noble Lords, Lord Truscott or Lord Taylor, were to complain to the European Court of Human Rights of any alleged violation of their convention rights, their complaints would undoubtedly be declared inadmissible.
	The sub-committee and the committee decided, in the light of the seriousness of the allegations, that particularly strong evidence was required before they could be satisfied that the allegations were proved. The four Members were fairly informed of the case against each of them. They each received legal advice. They each had a fair opportunity to answer what had been put to them, both in writing and orally. The record of their interviews, which is now before the House, shows the conspicuous, courteous and fair way in which the sub-committee questioned them. However, the noble Lord, Lord Truscott, a former Minister of the Crown, who had the benefit of the advice both of a partner of the firm Bindman and Partners and apparently of the former DPP Sir Ken Macdonald QC, treated attack as his best line of defence. He alleged in his letter before the House of 4 May to the chairman of the Committee for Privileges, that the sub-committee's report bore very little relation to the evidence he had given at the hearing. He described the sub-committee's conclusions as,
	"a crude attempt to arrive at a predetermined judgement"—
	an allegation of actual bias on the part of the members of the sub-committee. He also claimed that the report was,
	"surprisingly and disappointingly intellectually flawed".
	The noble Lord's letter of appeal continues even more bizarrely:
	"At the Hearing itself I felt like a Guantanamo inmate. I was continually interrupted, with one Member in particular being aggressive and descending at times into sarcasm. I at once felt that my 'guilt' had been prejudged. My wife, whose uncle spent time in the Gulag, can't escape a feeling of déjà vu. 1930s Russia. Stalin is in power. Political committees decide an individual's fate on the basis of ill-founded allegations and without any evidence of actual wrongdoing".
	I have read and reread the entire record and the sub-committee's full report. There is no basis for the extraordinary attack that was mounted by the noble Lord, which aggravates his misconduct and demonstrates a total lack of judgment or self-knowledge.
	As for the noble Lord, Lord Taylor of Blackburn, his lawyers alleged in his appeal that the finding against him could not stand,
	"because it was reached through an unfair process",
	and that he was,
	"denied basic procedural safeguards guaranteed by domestic and international law, and by the House of Lords own rules. Not least of these is the right to know the charges against you and to test the evidence against you through cross-examination ... and the right to confront your accuser".
	Like the noble Lord, Lord Truscott, the noble Lord, Lord Taylor, declined the invitation to present his appeal in person to the Committee for Privileges. Unlike the noble Lord, Lord Truscott, the noble Lord, Lord Taylor, also refused to appear before the sub-committee. Instead, he submitted a statutory declaration. As a result, the sub-committee at no stage had the opportunity to question him on the detail of his defence. However, the evidence against him was cogent and compelling.
	The noble Lord, Lord Taylor, was advised throughout by Finers Stephens Innocent. His lawyers raised procedural and legal objections based on what the sub-committee rightly described as a "fundamental misconception" of its role. In my view, they were also based on a fundamental misconception of both domestic law and international human rights law. In his letter of 17 February, Mr Mark Stephens alleged that the sub-committee,
	"appear to wish to proceed by flouting both the letter and spirit of the right to a fair trial, guaranteed under Article 6 of the European Convention on Human Rights".
	In his letter of 12 March, he referred to what he described as the "pretence in the code" about the fairness of the procedures. These and other criticisms were entirely misguided.
	A further point is now made in an attempt, I think, to persuade the House not to suspend either noble Lord, Lord Truscott or Lord Taylor, from the service of the House until the end of the current Session. It is apparently said by Mark Stephens, the lawyer of the noble Lord, Lord Taylor, and repeated fairly and properly by the noble Baroness, Lady Mallalieu, that they were not warned that the House had the power to suspend and that the guidance sent to them clearly stated clearly—as it did—that the House had no power to suspend, so they will face a retrospective penalty. That might be a good argument if it could be shown that it would have made any difference to their conduct or their dealings with the sub-committee or committee if they had known that there was a power to suspend. However, that has not been suggested by Mr Stephens or the noble Baroness, Lady Mallalieu. It would be entirely unrealistic to suppose that if the noble Lords had known of the possible penalty, they would have advanced any defence of their conduct that has not already been considered by the committee.
	Accordingly, that does not constitute a good and sufficient reason for this House to reject the committee's recommendation as to the sanction of suspension that it has proposed. I really respect the commitment of the noble Baroness, Lady Mallalieu, to natural justice and fairness; I entirely share it as a human rights lawyer and a public lawyer. However, I do not consider that there is a breach of the principles of natural justice or fairness, which are flexible principles. They are not conceivably breached in this case, and the penalties are in my judgment entirely proportionate.

Lord Falconer of Thoroton: My Lords—

Lord Goldsmith: My Lords—

Lord Maginnis of Drumglass: My Lords—

Lord Falconer of Thoroton: My Lords, I shall talk briefly on this issue; I do not think this is an appropriate occasion for a long debate. I do not intend to focus at all on the contents of the two reports in so far as they deal with the facts. If we wish to have a plausible process in which we consider the disciplining of our Members, we can do it only on the basis that those who look in detail at the evidence are respected in relation to what they do. I have read both reports. The work done by the sub-committee is utterly unimpeachable. There were 18 hearings. It has heard the evidence and analysed it with great care, and we should leave it to make the conclusions. It would not be fair for us to deal with an analysis of the facts on the basis of a casual look ourselves.
	It must be clear that we are determining this on the basis of the facts, not on any basis to pander to public opinion. It must be our decision, based on the facts. I shall focus therefore only on the process. First, I believe that the advice given by my noble and learned friend Lady Scotland opened the door, quite rightly, to the possibility that there was a power to suspend. I believe it to be right that the body which decided whether or not to say that there was the power to suspend was the Committee for Privileges, which was greatly assisted by my noble and learned friend in doing that. I agree entirely with the memorandum put forward by the noble and learned Lord, Lord Mackay of Clashfern, who gets it precisely right.
	Secondly, I do not agree with the noble and learned Lord, Lord Lloyd of Berwick, who says that there is necessarily a clash between what my noble and learned friend Lady Scotland says and what the noble and learned Lord, Lord Mackay, says. It does not matter. We should support what the noble and learned Lord, Lord Mackay of Clashfern, says, because it seems to me to have a plausible disciplinary process. The idea that you cannot suspend is, with respect, not plausible.
	Thirdly, paragraphs 39 to 53 of the sub-committee's report, which is published as an annex to the second report of the Committee for Privileges, give a totally clear and insightful account of our obligations in relation to paid advocacy. We should adopt them as a House because they make absolutely clear that there is no real doubt about what is across the line. For example, is there anyone in this House who cannot distinguish between the eminent doctor who speaks in this House and urges it to give more money for the National Health Service where she may be employed and will therefore benefit—about which we have no complaint—and a Member of this House who is willing to make speeches and try to persuade other Members to pursue a particular aim in legislation because they are paid? That is where the line is drawn and that is the point that my noble and learned friend Lord Irvine of Lairg makes clear. Do not be distracted by any arguments about the greyness of the line. The position was very clearly identified.
	The third and final point—

Noble Lords: The fourth!

Lord Falconer of Thoroton: My Lords, to quote my successor, accountancy was never my strong point. Tragically, everyone is nodding. On the point made by my noble friend Lady Mallalieu, if one looks at the evidence bundle, there is a letter in which those acting on behalf of the noble Lord, Lord Taylor of Blackburn, say that this is a process which affects, "my reputation and my livelihood". I completely agree with that analysis. I find it totally implausible that, "Because I did not realise the House could suspend me, I thereby conducted my proceedings in a different way". I have thought very carefully about this important point, which was made incredibly well by my noble friend Lady Mallalieu, and I do not think that it would have made any difference. Therefore, the view I have formed is that it will not affect the way I vote. I will vote in favour of the first report and if it is accepted, I will vote in favour of the second report.

Lord Morris of Aberavon: My Lords, I thank the noble and learned Lord, Lord Mackay, and the noble and learned Baroness the Attorney-General for their assistance. It is one of the duties of the Attorney-General to advise Parliament, sometimes at short notice and frequently in uncharted territory. The Attorney-General has referred to a respectable argument. When I hear these words, I reach out for an illusory book of precedents. I have had to use it myself. It does not mean that there is solid and unassailable authority for a conclusion. In the absence of firm authority, it is the best that one can do. Having read them very closely, I prefer the conclusions of the noble and learned Lord, Lord Mackay. The Attorney-General is right to conclude that the safer course is to create a legislative framework to confer a power of suspension. She is right about that. However, such legislation could not be retrospective. We are dealing with the situation as we find it.
	It is common ground that we cannot exclude a Member permanently. Otherwise, a wicked majority might wish to exclude the whole of the Opposition. That could have advantages for some. Secondly, the House, on this common ground, could imprison, despite practical difficulties, or fine. The latter, in the present circumstances, has its own attractions.
	The noble and learned Lord, Lord Mackay, has argued that we would not be extending our privileges if we adopted our procedures to preserve order and decency. It is a long-standing power. We have done so in other contexts. We draw up the rules about the House, and we have undoubtedly used that as part of our privileges.
	While nothing is certain in this field, I conclude, as the noble and learned Lord, Lord Mackay, has done, that we have the inherent power to suspend for a defined period within the lifetime of a Parliament a Member guilty of clear and flagrant misconduct. It is dangerous and unnecessary to give alternative illustrations of facts. We are dealing with particular facts as found by the Committee for Privileges. I ask myself: if a Member behaves in an inappropriate fashion—which is, of course, subject to a subjective judgment—is the House powerless to act? I conclude that it is not.
	There is no valid argument against suspension, except that it has not been done before for a long time. Common sense dictates that, if you can imprison or fine, it should be within our power to impose a lesser penalty.

Lord Goldsmith: My Lords, I do not want to prolong the legal debate. However, I would like to make one point about the position of the advice and the contrasting advice that has been given. To disclose my position, I support the conclusions of the first report and, with a heavy heart, the conclusions of the second report.
	I had the privilege, when I held the office that my noble and learned friend Lady Scotland now holds, to advise both this House—for example in the debate on reasonable chastisement—and the Committee for Privileges from time to time. I regarded those occasions as occasions for advice and as somewhat different from the occasions when the Government were asking whether a particular course was lawful. I see no dishonour whatever if this House takes the view—and the noble Lord the Lord Chairman is right to say that it is for this House to do it—that it prefers one legal view over another. There is no dishonour at all, not least because the noble and learned Baroness made it clear in her advice that she saw that there was a respectable view both ways. Therefore, I very much hope that, if the House decides to vote for the first report—as I will—she will not take that as any taint whatever on the very high regard in which I certainly hold her and I know that others do as well.

Noble Lords: Hear, hear!

Lord Goldsmith: My Lords, I want to say one other thing about this. I reached the conclusion, for the reasons that have been advanced—I do not want to repeat them—that we do have the power to suspend. I am glad to have reached that conclusion, because I would have been unhappy if this House did not have such a power to regulate its own procedure. I would have been unhappy justifying our present position as a self-regulating House if we did not have such a power. I emphasise—I respectfully urge noble Lords to view the matter the same way—that the question is not whether we would like to have the power, but whether we do have the power. My conclusion is that we do have the power and, as it happens, that we should exercise it as well. The reputation of this House is high because we have the ability and we have exercised the power to regulate our procedures and our Members in the past, not because we are going to arrogate a new power to ourselves today.

Lord Mackay of Clashfern: My Lords—

Lord Maginnis of Drumglass: My Lords—

Lord Hunt of Kings Heath: My Lords, the will of the House indicates that we hear from the noble and learned Lord, Lord Mackay.

Lord Mackay of Clashfern: My Lords, I participated in this business with a heavy heart, as many noble Lords have expressed today. But one thing I am absolutely clear about is that all in the Privileges Committee and the sub-committee wanted to be fair to our colleagues in every possible respect. The noble and learned Baroness the Attorney-General knows that I have the utmost respect for her and that in the past I have shown some small but tangible evidence of that. She pointed out that there was a respectable argument the opposite way and I did my duty for the Privileges Committee to explore it. I think she would accept that the argument presented in my memorandum is sufficiently respectable to command a good deal of support in this House. But I am not at all dismissive of the opinion of the Attorney-General and of course I spoke to her before I submitted anything to the Committee for Privileges. I said that I was minded to do something like this and we had a conversation, the content of which is between us.
	On the point raised by the noble Baroness, Lady Mallalieu, the House will wish to be fair in every respect to our colleagues. The position that has to be kept in mind is that the Committee for Privileges had no power to impose the sanction of suspension. That sanction, if it is to be imposed, is imposed for the first time in this House. By the time we come, if we do, to impose a suspension, it should be noted that the noble Lords in question had been clearly warned that the House, on the advice of the Committee for Privileges, considers that it has the power to suspend. The noble Lords have been warned that these resolutions are going down today and that if they have anything to say in respect of the treatment they have received or can suggest that what they did would have been different if they had realised that, after all, the House has this power, this is their opportunity to do so. It has been made abundantly clear to them that they may speak in these debates and in respect of the resolutions which are to be moved separately from the reports.

Lord Maginnis of Drumglass: My Lords, I apologise if my very brief point appears to be a diversion. We are all grateful to the Lord President, the noble Baroness, Lady Prashar, the sub-committee, and the Privileges Committee for the energy and determination that they have given to this problem.
	Before we forget, five noble Lords were mentioned in the report in the Sunday Times on 25 January. One of them—my noble friend Lord Rogan—said, "No, I can't do that. It would not be right". That should not be forgotten today. I am grateful to him for representing what I believe was the honour of the House and I would not like this debate, sad though it is—and "sad" is the dominant word—to finish without those of us here acknowledging that at least one of our Members upheld the honour of this House. I am grateful to him and I think that other noble Lords will also be grateful.

Baroness Scotland of Asthal: My Lords, as I have now been mentioned in despatches so often, it is only right that I should make clear to the House the position that I hold. But first I should say that it is right that the noble and learned Lord, Lord Mackay, and I have had a long association. Many noble Lords will know that it was he who had the poor judgment to agree to my taking silk at the age of 35. He reminds me often that it is said that he appointed the noble Baroness, Lady Kennedy of The Shaws, because he knew she was a Scot, and me because he believed I was a Scot.

Lord Mackay of Clashfern: My Lords, needless to say he had a better reason.

Baroness Scotland of Asthal: My Lords, let me make plain what my position is as Attorney. I was invited to assist the committee in relation to a vexed matter which had tested the House on a number of occasions since 1642. The House had struggled with this matter in 1705 and 1956, and then again in 1999 and 2008. I was clear that any advice I gave to the committee could not and would not bind the House; it is for the House to determine how it should respond. I should also make clear that I felt keenly indeed the position in which the House was placed; all noble Lords are concerned about the honour of this House and would feel besmirched if any of our Members behaved in such a way as to bring us all into disrepute. But my role as Attorney is not to give the House the advice it may wish, but the advice it needs to hear in order for the House then to make its own decision.
	It is important that the House understands the constitutional enormity of what it is about to do; in all its history it has never suspended a Member. It is open to the House to do so but it has to consider whether these changed times entitle and oblige it to act differently. However, because there is no external scrutiny of what your Lordships do—no one can gainsay your Lordships' decision—your Lordships need to be slow, judicious and careful indeed before you exercise this power, particularly at this time when there is a furore about our constitutional arrangements.
	We have had a careful and seasoned debate. I make it plain that, as Attorney for the time being, I am much comforted to see past Attorneys, who may have given similar advice which has been rejected, here with me. It is important, therefore, that the House understands that I gave the advice without fear or favour and without even looking at the facts complained about. I will not personally vote on either the first report or the second because I take the view that, as the adviser to the House, it would be inappropriate for me so to do. But I absolutely understand, without any doubt at all, the anger, concern and hurt that the House feels.
	It is for the House to determine whether it seeks now to accrue unto itself a power that it has never hitherto exercised. The only time this was ever done was when the republic was in being, Cromwell was in position, and two loyalist Lords were suspended because they went to the King as opposed to coming to this Parliament. For that reason, and that reason alone, they were suspended. In 1705 our House determined that that was not a proper purpose. I do not say for a moment that this House cannot do that which it may choose to do; I simply say be cautious, be proportionate and consider what the best course is. I trust this House and I am sure that it will come to the right conclusion.

Lord Brabazon of Tara: My Lords, we have had some impressive speeches today. I have certainly enjoyed the debate. As a non-lawyer, I have found it a great privilege to listen to such eminent legal brains as those we have heard from today, including the noble and learned Baroness the Attorney-General.
	There is little for me to say in summing up. I listened carefully to the arguments put forward by the noble Baroness, Lady Mallalieu, but I suspect that they were answered far better by the noble Lord, Lord Lester of Herne Hill, and the noble and learned Lord, Lord Falconer of Thoroton, than I could possibly do. I will say only, in agreement with the noble Lord, Lord Maginnis of Drumglass, that indeed there were those who did not fall for this scam, and we should remember that there are still good people about. However, as the noble and learned Baroness the Attorney-General said, it is a matter for this House to decide, and I suggest that it now does so. I beg to move.
	Motion agreed.

Privileges Committee: Second Report

2nd Report: Privileges Committee 88 I
	2nd Report: Privileges Committee 88 II

Motion to Agree

Moved By The Chairman of Committees (Lord Brabazon of Tara)
	That the 2nd Report from the Select Committee (HL Paper 88) be agreed to.
	Motion agreed.
	Motion to Suspend
	 Moved by The Chairman of Committees
	That the noble Lord, Lord Truscott, be suspended from the service of the House until the end of the current Session of Parliament.
	Motion to suspend agreed.
	Motion to Suspend
	 Moved by The Chairman of Committees
	That the noble Lord, Lord Taylor of Blackburn, be suspended from the service of the House until the end of the current Session of Parliament.
	Motion to suspend agreed.

Policing and Crime Bill
	 — 
	First Reading

The Bill was brought from the Commons, read a first time and ordered to be printed.

Industry and Exports (Financial Support) Bill

Main Bill Page
	Copy of Bill
	Explanatory Notes

Third Reading

Bill passed.

Postal Services Bill [HL]

Main Bill Page
	Copy of Bill
	Explanatory Notes
	Amendments

Third Reading

Amendment 1
	 Moved by Lord Mandelson
	1: After Clause 13, insert the following new Clause—
	"Report on agreement to dispose of shares in a Royal Mail company etc
	(1) This section applies to any agreement that would (or could) reduce the proportion owned (directly or indirectly) by the Crown of a Royal Mail company.
	(2) Where such an agreement is entered into, the Secretary of State must lay a report on the agreement before Parliament as soon as reasonably practicable after the agreement has been entered into.
	(3) The report must state—
	(a) the principal objectives intended to be achieved by the entering into and carrying out of an agreement to which this section applies, and
	(b) the extent to which the Secretary of State considers that the carrying out of the agreement mentioned in subsection (2) will achieve those objectives.
	(4) The report must state—
	(a) the principal criteria applied in deciding whether an agreement to which this section applies should be entered into, and
	(b) the extent to which the Secretary of State considers that the agreement mentioned in subsection (2) meets those criteria.
	(5) The report must contain a summary of the terms considered by the Secretary of State to be the principal terms of the agreement."

Lord Mandelson: My Lords, I have provided a number of commitments to this House to be as transparent about the process to find a partner for Royal Mail Group as commercial confidentiality allows. Amendment 1 stems from this.
	We have had a number of debates during the earlier stages of the Bill about the detail of our negotiations. Expressions of interest from potential partners have already been received and we are actively examining them. I shall provide a further update in due course on the bid process.
	Our criteria, set out clearly in February, make it clear that any strategic partner must be motivated to modernise Royal Mail over the long term, and must offer value for money for the taxpayer. We will not do a deal at any price. There is some way to go and it may well take longer to reach agreement with a partner than it takes to debate and agree this Bill. Your Lordships have stressed the need to be assured that the deal that we ultimately agree meets the criteria that we have set. The noble Lord, Lord Hunt, has tabled a number of amendments in this regard. Recognising your Lordships' legitimate interest in this area and my desire to be transparent, I agreed on Report to consider his amendments and return to the House. I am therefore moving Amendment 1.
	The amendment requires the Secretary of State to lay before Parliament a report on any binding agreement that would reduce the Crown's ownership, either directly or indirectly, of a Royal Mail company. It sets out the detail that must be covered by the report: the Government's objectives for a transaction and whether they have been achieved; the criteria that have been applied in assessing the transaction and whether they have been met; and, finally, the principal terms of the agreement.
	I trust that your Lordships will recognise this as a significant commitment on the Government's part to ensuring the transparency of any process to reduce the proportion of shares in Royal Mail held by the Government, not just the partnership proposal that we are currently pursuing. Therefore, I beg to move.

Lord Hunt of Wirral: My Lords, I thank the Secretary of State for bringing this amendment forward, as he promised to do on Report. I welcome his assurances that the criteria applied in the first report will be those that have been published and spoken about in the debates on this Bill. I thank him for that.

Lord Razzall: My Lords, as the Secretary of State will remember, we supported the proposals brought forward by the noble Lord, Lord Hunt of Wirral. Clearly it is difficult to find the right between the role of the Executive and the Government, on the one hand, and the role of parliamentary scrutiny on the other. The Secretary of State has done a good job of striking that delicate balance. We certainly support the amendment.
	Amendment 1 agreed.
	Clause 14 : Annual report on post office network
	Amendment 2
	 Moved by Lord Mandelson
	2: Clause 14, page 6, line 35, leave out paragraph (b) and insert—
	"( ) the postal services, services provided under arrangements with a government department and other services that are provided at those post offices, and
	( ) the accessibility of those post offices to users of those services."

Lord Mandelson: My Lords, Amendment 2 adds to Clause 14, which requires an annual report on the post office network. The amendment adds a requirement to report on services provided at post offices; that is, postal services, services provided under arrangements with government departments, and other services provided at post offices.
	This amendment accepts, and in two respects builds on, the proposal made on Report by the noble Lords, Lord Hunt and Lord De Mauley. First, it ensures that any report includes details of services provided to all the Post Office's customers—small businesses as well as the general public. Secondly, it ensures that the Post Office reports on the services it provides on behalf of all postal operators and not just Royal Mail.
	I hope that noble Lords agree that this provision, together with Clause 14 which it amends, will improve the transparency of the post office network and provide important and robust information to Parliament. Therefore, I beg to move.

Lord Hunt of Wirral: My Lords, my noble friend Lord De Mauley and I thank the Secretary of State for accepting the principle of the amendment that we introduced on Report and welcome what the Secretary of State has just said. Keeping the services that post offices can offer under review will be critical to their ongoing support.

Lord Razzall: My Lords, I agree.
	Amendment 2 agreed.
	Clause 36 : USP access conditions
	Amendment 3
	 Moved by Lord Mandelson
	3: Clause 36, page 20, line 19, at end insert—
	"( ) In imposing a USP access condition that imposes price controls in connection with the giving of access to the universal service provider's postal network or to part of that network, OFCOM must have regard to such of the costs incurred in the provision of that network, or part of that network, as OFCOM consider appropriate."

Lord Mandelson: My Lords, in moving Amendment 3, I will also speak to the other amendments in this group standing in my name. Under Clause 36, Ofcom would have the power, provided that certain conditions were satisfied, to set the price that other companies must pay to access the network maintained by the universal service provider. In doing so, Amendment 3 will ensure that Ofcom has regard to the costs of providing that network as appropriate. This amendment follows suggestions made in Committee by the noble Lords, Lord Hunt and Lord De Mauley, and by my noble friend Lord Clarke.
	Competition can improve the efficiency of the postal sector and stimulate innovation. Both are essential if we are to sustain the universal service and to ensure that it meets the changing needs of consumers. Competition must, however, be appropriate and fair. The new access regime set out in this Bill is designed to be transparent and cost-based and to ensure there are no unfair cross-subsidies between postal companies. The fact that Royal Mail needs to modernise is accepted by all the relevant parties. Inefficiencies will take time to drive out, but they must not be locked in for the long term. We believe that this amendment will enable Ofcom to strike the right balance in taking appropriate account of costs.
	Amendments 4, 5 and 6, too, respond to amendments tabled during Committee by my noble friend Lord Clarke and the noble Lords, Lord Hunt and Lord De Mauley. Clauses 41, 42 and 43 enable Ofcom to establish a scheme to share the cost of providing the universal service. Amendment 4 has the effect of giving Ofcom a duty, rather than a power, to review whether the obligation to provide the universal service imposes a financial burden on the universal service provider. Amendment 6 requires that the first of these reviews must be undertaken no later than five years after Clause 41 comes into force and every five years thereafter. Amendment 5 will ensure that Ofcom must consider whether the universal service provider is meeting its statutory obligations in a cost-efficient manner, in deciding whether any financial burden is unfair and, therefore, that a new scheme is needed.
	Amendment 7 responds to suggestions made by the noble Lords, Lord Hunt and Lord De Mauley. It will apply the affirmative resolution procedure to any future regulations dealing with the creation of a scheme to share the cost of providing the universal service. It also provides that the Secretary of State must give his consent before any regulations are laid. This reflects the reality that government support would also almost certainly be necessary for any regulations to gain the approval of Parliament.
	Finally, I would like to say a few words on the subject of appeals. The adequacy of this Bill's appeals provisions has been the subject of some debate. In particular, some have argued that judicial review by the High Court should not be the means of appeal for some decisions taken by Ofcom. While I do not have a specific proposal to make today, the Government have heard what has been said and will continue to give this issue careful consideration as the Bill moves to the other place. I beg to move.

Lord Clarke of Hampstead: My Lords, at this very late stage in the Bill I rise to say how much I welcome the amendment dealing with Ofcom and the new regulation regime that is proposed. I welcome it because I believe that it will be a great boost for Royal Mail if it gets a fair regulator that allows it to do its job properly.
	I cannot let the opportunity pass without saying how sad I am to be at the requiem of a fully publicly owned organisation and to see happen the privatisation that is proposed in the Bill. However, it would be wrong to expand on that on this amendment; I just wanted it said.
	I hope that our friends of all parties down at the other end will find the courage to put Part 1 into a shape that will allow Royal Mail to remain fully publicly owned. I welcome other parts of the Bill and the tremendous progress that we have made on the public pensions and, as I just said, on the regulator.
	I take this opportunity to thank the noble Lords, Lord Tunnicliffe and Lord McKenzie of Luton, for their unfailing courtesy during the Bill's long passage through Committee and Report. I should also thank members of the Bill team, who have been equally helpful when I have put questions to them.
	I welcome this group of amendments because of the proposed regulation, which I wish well. I place on the record my gratitude to all those who have shown their patience with me over the past few weeks.
	Amendment 3 agreed.
	Clause 41 : Review of costs of universal service obligations
	Amendments 4 to 6
	 Moved by Lord Mandelson
	4: Clause 41, page 23, line 8, leave out "may" and insert "must"
	5: Clause 41, page 23, line 12, at end insert—
	"( ) In carrying out a review under this section OFCOM must consider the extent to which, in their opinion, the provider is complying with those obligations in a cost-efficient manner."
	6: Clause 41, page 23, line 12, at end insert—
	"( ) The first review under this section must be carried out no later than 5 years after this section comes into force; and every subsequent review must be carried out no later than 5 years after the previous one."
	Amendments 4 to 6 agreed.
	Clause 42 : Sharing of burden of universal service obligations
	Amendment 7
	 Moved by Lord Mandelson
	7: Clause 42, page 24, line 40, at end insert—
	"( ) Regulations under subsection (5) may not be made unless—
	(a) the Secretary of State has consented to the making of the regulations, and
	(b) a draft of the statutory instrument containing the regulations has been laid before Parliament and approved by a resolution of each House of Parliament."
	Amendment 7 agreed.
	A privilege amendment was made.
	Motion
	 Moved by Lord Mandelson
	That the Bill do now pass

Lord Mandelson: My Lords, I want to acknowledge the fact that the content and tenor of our debates, which have lasted in the region of 35 hours over the past two months, have upheld the tradition of this House in subjecting legislation to robust and detailed scrutiny and holding the Government to account. I pay tribute in particular to the noble Lords, Lord Hunt, Lord Razzall and Lord Clarke. We do not agree on everything in the Bill, but each has raised important issues across the scope of the Bill: on the Royal Mail's organisation, on pensions and, as discussed just now, on regulation. As a result, the other place will receive a Bill that has been much improved. This could not have been possible had it not been for the contributions made during the Bill's passage through this House and the excellent and commendable work undertaken by the Bill team. I record my thanks for its work, not just for the Government but, I notice, for the opposition parties as well, in the best spirit and tradition of the Civil Service.

Lord Hunt of Wirral: My Lords, I respond warmly to the comments of the Secretary of State. It has been a pleasure working with my noble friend Lord De Mauley and noble Lords on all sides of the House in seeking to improve the Bill; I am grateful to the Minister for what he has said about that.
	I join the Secretary of State in thanking the Bill team, not because it veered towards accepting the case put forward by other noble Lords, but because it was listening—as, indeed, was the Secretary of State. I hope that he will accept, in the terms in which he has just spoken, that we have striven to ensure that the Bill leaves this House in a better state.
	The Secretary of State will be aware that there are continuing concerns, some of which he addressed in his earlier remarks. We hope that his colleagues in the other place will listen as attentively as he has to these continuing concerns and accept not only the improvements which have been made in this House but the case for the further improvements that are still necessary.

Lord Razzall: My Lords, I join the noble Lord, Lord Hunt of Wirral, in thanking the Secretary of State for the courtesy he has shown to us throughout the Bill's passage. I endorse everything that he and the noble Lord, Lord Hunt, have said about the way in which the debate has been conducted. However, I would add one little coda to that. It will have been apparent to everybody who sat through your Lordships' debates that the noble Lord, Lord Clarke of Hampstead, did not necessarily agree with the Bill. The fact that he conducted his rearguard action with such skill does him great credit, even if he has not carried the majority of his own party or either of the opposition parties on many of the points that he raised. The real creator of the Bill, Mr Richard Hooper, is sitting in the Public Gallery, and we are very glad to see him here.
	Bill passed and sent to the Commons.

House adjourned at 5.56 pm.